When you have a current loan that needs to be repaid and you’re not sure which refinancing option is right for you, you might have considered turning to hard money lenders. Unlike other types of loans, hard money loans are unique in that they are provided by private groups or lenders and usually involve putting in property as a form of collateral. While hard money loans are typically meant to be short-term – sometimes they’re even referred to as bridge loans – and are most common in real estate situations, such as refinancing the mortgage on a property, it might be possible to refinance using a hard money loan in other situations as well. If you aren’t positive whether this is the right route for your family, here’s a little more information on the ins and outs of refinancing and using hard money loans to do so.
It May Help Your Refinancing Process Move More Quickly
Traditional refinancing, while often helpful, can often drag out into a long process. This is especially true when you are hoping to refinance something like a conventional mortgage, as many banks may have very detailed processes and multiple requirements. When you go through hard money lenders Los Angeles instead, however, you might be able to access the loan in a matter of weeks, depending on some other factors involved. If you don’t qualify for traditional refinancing or don’t want to spend all the time going through a long process, this could prove to be a truly helpful alternative.
It Can Help Property Owners in Several Types of Situations
When you turn to hard money lenders in California, it could be for one of several reasons. Hard money loans can be used for several refinancing purposes, but there are a few common situations that stand out. These usually include, but are certainly not limited to:
- Property owners wishing to avoid foreclosure
- Those who don’t want to go through, or can’t qualify for, conventional loans
- Real estate investors
You Might Be Able To Get Flexible Refinancing Terms
As you research hard money loans as an option for refinancing, look around for lenders who may be flexible in their terms. While this may not apply to all lenders, many require some sort of collateral to be put in, typically real estate of some kind. However, while putting in collateral may not be negotiable, other aspects of the loan might be. For instance, the lender could be willing to budge on the term length, switching, for instance, from a three-year length to a five-year one, thereby making your payments a bit easier to manage. You might also be able to negotiate the interest rate and whether or not a credit check will be needed.
There are several options out there when it comes to refinancing, but if you want to broaden your horizons, you may be considering a hard money loan rather than more conventional bank loans. While all types of loans come with their pros and cons, these details could help you make the best choice possible.