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Hard Money Loans Depend On the Value Of the Property
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Posted On :
Oct-05-2010
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Article Word Count :
547
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The popularity of hard money loans are increasing day by day as they offer various benefits. One of the most important benefit is even individuals who have a terrible credit history can apply for this loan. The lenders of these loans are only interested in the value of the borrower's property.
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The hard money loans are the most sought out by real estate investors. This is because the process involved in getting this loan sanctioned is much simpler compared to the process of a traditional loan. These types of loans are also called private loans as the lenders of such loans are private investors. The main reason for the popularity of this loan is even individuals who have a terrible credit history can apply for this loan. Lenders of these loans mainly focus on the value of the property of the borrower. They will check the borrowers qualification but their main interest will lie on the value of the property.
The main security for the lenders of hard money loan is the property itself. Before they agree to lend the amount to the borrower, they must be comfortable with the value of the property. Thus, the lenders will first check every nook and corner of the property before they agree with your loan application. This is because these lenders are investors and will want to invest in a property that will bring in the borrowed amount if the borrowers fails to repay. Once the lender of the hard money loan is satisfied, he will grant you the loan. Generally, these lenders will loan up to 70% of the borrower's property value.
The popularity of hard money loans are increasing day by day because there are several benefits associated with it. One important benefit is the process to obtain this loan is very simple and fast. When you are in a financial pickle approaching a traditional lender may not be your best option as you need to fulfill certain requirements. Thus during these stressful situations, opting for this loan will be the best option for you to overcome your financial difficulty.
Along with these benefits of the hard money loans, there are also some drawbacks associated with it. One important drawback is these loans are very expensive in terms of interest and fees charged compared to conventional loans. Apart from these loans, FHA loans are also popular among individuals who want to purchase a residence of their own. FHA is the abbreviated form of Federal Housing Administration. This loan was introduced as a means to improve home sales during the Depression.
The FHA loans are offered to first-time home buyers as the rate of interest is low, fixed or flexible when compared with other type of loans. The lenders loan the money to the borrowers and the Federal Housing Administration backs the loan as a protection to the lender. To offer such loans to borrowers, lenders must be licensed through the FHA and follow its specific guidelines. Before you apply for these FHA loans there are some things that you have to keep in mind. The first and foremost point is your property should be in good condition to be eligible for this scheme.
Once you apply for the FHA loans, these professionals will check the condition of the property. These inspections are more strict than normal. All the insulation, plumbing, windows, wiring, roofing, etc are inspected. If the property is not up to the mark then the FHA loans will not be granted to the individual.
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Article Source :
http://www.articleseen.com/Article_Hard Money Loans Depend On the Value Of the Property _36313.aspx
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Author Resource :
Issac Gates is a financial advisor who have good information on hard money & FHA loans. For more information he recommends to visit http://www.blueh2ofunding.com/
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Keywords :
hard money, FHA loans,
Category :
Finance
:
Mortgage
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