Are you wondering if you should use bridge loans or hard money loans for acquisition? Are you struggling financially? If yes, bridge loans will lend you a great hand of help. Hard money loans are here to help investors with financial challenges. Traditional loans will force you to jumpstart and accomplish a lot of processes. These loans have a very long approval process and tend to adhere to strict approval criteria. In fact, traditional loans ask for a significant amount of down payment. This can leave investors strapped without cash for a very long time. Hard money loans are designed to fill this gap and help borrowers financially.
Making Down Payments
In general, traditional loans need huge down payments. You will be expected to pay 20 to 35 percent the actual price. On acquisition, you will be asked to pay more up-front charges. Most investors find it difficult to use conventional forms of financing or pay for everything from their pocket. This is when hard money loans alias bridge loans become handy. This is an amazing tool to finance your investment. With the help of hard money loans, you will be able to buy a property with only 10% the price. And, with time, you can shop for better and permanent financing methods.
A lot of borrowers admire hard money loans for its quick rate of approval. Conventional lenders work with serious regulatory restrictions and intense paperwork for loan approval. These loans can take between two to three months for approval. On the other hand, hard money loans need only a week for approval (in some cases you need only a day for approval). This is what makes hard money loans a great way of getting your investment rolling.
Flexibility is another interesting benefit in using bridge or hard money loans. Unlike traditional loans, bridge loans can be operated by yourself! You don’t have to worry about FHA guidelines or other regulations. After all, these factors make conventional financing very difficult or rather impossible. When you opt for hard money loans, you will be able to overlook many constraints. The bridge loans are planned to assess borrowers holistically. Loans are approved based on the project, borrower’s experience and other viable exit strategies. That means, you can avail a bridge loan with less than celestial credit scores too!