Montag, 3. März 2014

Getting Cash With Non-Traditional Lenders If Banks Will Not Lend

Everybody is pretty much aware that the economy has changed and the way a lot of things have been done has changed. Banks no longer lend like they did before the economic recession struck, and they take even longer to reach a decision than they did before. However, there are still ways to locate funds to complete investment type deals by using hard money lending sources.

People who are very interested in providing money to support these types of transactions have been around for a very long time. They like to help in the purchasing of certain properties that are deemed risky by traditional sources. This is either because of the property itself or the credit history of the person seeking funds.

Another reason a person may seek the assistance of a hard money lender is that the deal must take place quickly or it will not happen at all. This occurs during short sales, where the land or building is selling much lower than it normally would, because the land became over valued and the mortgage is much high than the land is worth.

When something like this arises, the people in need of cash will locate investors who might be interested in providing short term funding that will benefit both parties. The investors generally do not want provide all the funding for a project and they do expect repayment to happen within a short time period.

One of the situations that occurs with great frequency now a days is the short sale transaction. Essentially, the original mortgage holder allows the person who had owned the property to sell it at below full value and less than what the mortgage amount is worth. The one seeking to buy it knows that this has to happen fast or they will lose the opportunity to gain control over the piece of real estate. The people lending the money in the new transaction places a value on the property. They will lend a certain amount and no more.

One of the differences between these lending groups and the banks is the cost of borrowing the money. They are not looking to lend the money for more than six years in most cases, and the interest rate they charge can be in the neighborhood of 10 to 15 percent. This actually works in the one seeking the funds favor as it acts as an incentive to try to find a traditional mortgage once the property is fixed up.

One of the good things is that in these situation the lenders really do not care about credit rating of the potential buyer, or if this person is involved in any type of foreclosure or bankruptcy proceedings. This is because they lend based on the value of the property. They will not give enough to cover the whole cost, usually they only cover 60 to 70 percent of the value, and this will give them some room to still make money if they have to sell it to get what they lent back.

Although the economy has changed and getting cash is not as easy as it used to be, there are still avenue to explore to find what one may need to complete a real estate transaction. Hard money lenders can sometimes help when no one else can.

Informative Housing Market Buying Tips

Since the recent recession, much has changed with employment, the housing market and so much more. In fact, it seems as though nothing has stayed the same. Below is a helpful real estate market buying guide to provide those interested in buying useful information that could close the deal, even in these tough times.

Most banks have gotten quite stiff with their lending guidelines, making it difficult to get approved a loan application unless all the necessities are addressed. These obstacles can be quite frustrating for the consumers, especially since they were used to another way of life. Unfortunately, creditors need to protect themselves.

Obviously, this is a huge change for Americans who were accustomed to buying properties quite easily, and often without the need for a down payment. Now, lenders have tightened their belts and have provided challenges that have not existed for a very long time.

The consumer has to change with the times in order to get what he or she wants. However, we have to take a step back and really review our own expectations because we must live within our means. Creditors and mortgage lenders have become more strict with the amount they lend to their customers, just to ensure that they will be able to maintain their responsibilities.

Job security is the number one thing that they will look for, so before applying, ensure that you have that. More often than not, a down payment will probably be necessary, which could be as much as 25% or more. Each potential buyer must understand that the situation is always a unique one but the final word is always the mortgage lender's.

For someone who is less risky, meaning they have a good credit score, a substantial down payment and job security, less will be asked of them. Those who do not, must prepare themselves for either savings and more money for future purchase, for example. With each creditor or mortgage lender wants is for their client to be able to pay all the responsibilities of the home as well as living expenses.

It's safe to say that many mortgage lenders and bankers lost a great deal of money when the housing market took a nose dive. In order to avoid this from happening, they are more strict with their lending guidelines. However, this enables buyers who are capable of acquiring a loan to benefit the most. They have buying power as well as opportunities to invest their money safely and make a profit quickly after.