When it comes to renovation financing, individuals there are many benefits to secured short term loans or hard money rehab loans. Read on to discover the benefits of hard money deals and how they can help those who want to purchase a home for the purposes of flipping.
There Has Never Been a Better Time to Get into Flipping Homes
In 2014 alone, there were over 300,000 repossessions of homes. This means there are even more opportunities for individuals to find homes for sale and flip them. The next important step after finding a home is to seek renovation lending. A benefit of using hard money mortgage lenders is the fact that unlike a traditional loan, these loans have a quick turnaround time, usually anywhere from a week to two weeks. This means individuals can get the financing they need and start renovation on the home as soon as possible.
Individuals Should be Aware of Differences with Loans
As opposed to how a traditional mortgage is structured, hard money loans provide higher interest rates. These can be as much as 18%. Investment mortgage lenders can offer different structures depending on the individuals needs. When dealing with secured short term loans or private loans, the loan can go anywhere from a year to even 20. Because of differences with loans for flipping a house, individuals should discuss with their banker possible changes or issues they should be aware of, so they do not enter into any type of loan without knowing all the facts.
Individuals Who Are New to Flipping Homes Should Start Out Slow
Those who have never flipped a house before, but like the idea and creativity involved in fixing up and reselling a home, should start out small. This is because sometimes snags can happen along the way, such as discovering renovations cost more than an individual thinks. By starting out small and working home by home, individuals will learn more, and become experienced home flippers.
Flipping real estate has many considerations individuals needs to make. Although there are a lot of homes on the market, people should be aware of the differences between hard money loans and regular loans. Interest rates and the length of the loan are different from a regular mortgage. Individuals should also start out slow, before they try to move on to mastering flipping several homes at once.