It’s not uncommon for home buyers to have trouble getting a conventional mortgage quickly. But what if that long, difficult journey to get in your home doesn’t have to be that hard?
Hard money mortgage loans can be the perfect bridge to a conventional mortgage, allowing you to quickly close on deals, complete necessary projects, and eventually refinance to a conventional loan.
Find out what a hard money mortgage loan is, why you should get one before you get a conventional loan, and how to refinance.
What is a hard money mortgage loan?
Hard money loans, also known as private money loans, are funded by private lenders or investor groups rather than banks. They allow borrowers to get a loan much quicker than the traditional route, because private lenders can evaluate situations on a case-by-case basis. They use common sense to determine whether they’ll provide you with a loan, rather than strict documentation requirements.
This freedom and flexibility gives opportunities to borrowers who may not qualify for a conventional loan, or those who need a loan quickly. Typically, repayment periods for hard money loans are one to five years, so they often are used for short-term projects such as property flipping.
The short-term nature lends itself to those who want to get in their home first, then refinance to a conventional loan later. However, Marquee Funding Group is one of the only hard money lenders in California that also offers long-term consumer loans ranging from 10 to 30 years, with fully amortized payment options.
Why get a hard money loan first?
If you’re going to have to refinance later, why not just get a conventional loan first? Well, conventional loans can be difficult to qualify for, and many people in various unique situations aren’t able to easily get one.
Traditional lenders will need to see pay stubs, tax returns, bank statements, and credit reports. So who “doesn’t qualify” for conventional loans, then? If you have trouble producing any of those documents, you will have trouble getting approved for a loan.
These documents prove to lenders that you can and will make your payments, so if you’re struggling with your credit score or can’t produce pay stubs because you’re self-employed, for example, you likely will not get approved.
With a hard money loan, you can do the following:
- Purchase a primary residence
- Consolidate debt and clean up credit
- Build a new house or remodel your home
- Acquire a second, third, or fourth mortgage
- Pay a legal settlement or settle a divorce
- Dissolve a family trust
- Pay off bankruptcy
- Get out of a foreclosure
If you do qualify for a conventional loan, it still can take several weeks for approval. With hard money loans, you can close in as fast as seven days.
For private lenders such as Marquee Funding Group, it’s about more than the deal at hand. Marquee Funding Group puts high priority on building long-term relationships with its borrowers and brokers. This mutual trust results in a lifetime of reliable real estate transactions that benefit both parties.
How to get a hard money mortgage loan
If this is your first time hearing about hard money loans, you may not know how to go about finding the right lender, or what is required. Marquee Funding Group provides hard money loans to California residents. Our goal is to be as clear and efficient as possible, which sets us apart from other lenders.
Marquee Funding Group doesn’t have many questions for borrowers: We simply want to know the property address and a short submission story. Since we evaluate each unique situation on a case-by-base basis, requested documentation will vary. But rather than needing strict requirements, we are able to listen and respond with a common-sense approach, focused on the merits of the deal.
What’s your loan scenario?
How to refinance out of a hard money loan into a conventional mortgage
Refinancing into a conventional mortgage from a hard money loan is simple with Marquee Funding Group. If your plan from the beginning is to refinance, we can discuss those steps from the start of the process and establish an exit strategy so that you will be prepared.
Developing relationships with our borrowers and brokers is important to our deals because we are able to operate from a place of trust, honesty, and transparency, where all goals and strategies are established and everyone knows what to expect and when.
If you’re planning to refinance to a conventional loan, you also can use a hard money loan to pay off debt and improve your credit score so it’s easier to qualify. Marquee Funding Group loans can be used to put you into a position to get a conventional loan within 3-18 months depending on your circumstance
Marquee Funding Group offers:
- Purchase money, rate and term refinance, and cash-out refinance
- Owner-occupied or non-owner-occupied consumer or business purpose loans
- Common-sense underwriting performed in-house
- Same-day approvals
- Loan amounts from $50,000 to $20 million
- Commercial, industrial, construction, and land loans
- Single-family and multi-family loans
- Fix-and-flip or fix-and-occupy loans
- Loan-to-value ratio of up to 70%, depending on other factors
Our team specializes in complex, unique situations that banks simply can’t wrap their heads around. Whether you’re self-employed, a real estate investor, a house flipper, or in another unique position that makes it difficult to qualify through traditional means, a hard money loan can provide the flexibility and common sense you need to achieve your goals.If you’re interested in getting started, submit your loan scenario or email us today. We look forward to working with you for many deals to come.
Photo by Stephen Leonardi on Unsplash