Advantages of a Private Loan
Private loans may seem daunting, scary, and perhaps unorthodox to many borrowers. While private loans may not be for everyone, it is beneficial for all potential borrowers to understand how a private loan may help them. However, private loans can offer several advantages, including speed and simplicity.
In this ever-changing competitive market, real estate opportunities come and go on short notice. Traditional bank loans may not offer the flexibility and timeliness that private loans provide. Private loans can fund projects in as little as a few days. This can make the difference in closing a time-sensitive investment opportunity. While banks can take several months to close loans, private lenders can usually close in a few weeks. Sometimes this window is even shorter- some private loans can be closed in several days. This expedited timeline allows borrowers to focus on what is most important to them: researching, finalizing, and closing competitive investment opportunities. The early bird gets the worm!
Private loans in Whittier, CA can be advantageous for several reasons: Private money lenders can also create individualized funding options. This can mean short-term private loans, for months or perhaps even days.
Private money lenders for real estate can finance projects that banks have denied. Hard money lenders are often primarily concerned with the amount of equity the borrower has in the property, and less concerned with the borrower’s credit score. With a smart investment, borrowers can gain equity quickly- and then reinvest, flip, and turn a profit.
Traditional loan programs are not always a one-size-fits-all solution. Private loans can offer superior flexibility and personalization, especially when real estate opportunities are time-constrained.
Hard money lenders typically offer a more favorable Loan to Value ratio than banks. The Loan to Value ratio reflects the amount loaned, compared to the value of the property. Private loans in CA generally follow at 60-80% LTV ratio. This is a significantly better LTV value than banks will typically offer. This lower LTV ratio means that private lenders are taking less of a risk; the property the loan is for will be held as collateral.
In conclusion, private loans may be the solution for time-sensitive investments. The real estate world never sleeps- it is always important to understand private loan options and advantages.