Where conventional and government-back financing have remained difficult loans to qualify for, more and more borrowers are flocking to bridge lenders for loan approvals. Bridge lenders offer a non-traditional form of financing often referred to as ‘bridge loans’ or ‘hard money’ loans. These loans are typically sourced from non-bank lenders, or private money lenders. Because bridge lenders have less stringent requirements for loan approvals, these lenders have seen a sharp spike in loan applications since the start of Q2 2015.
Just because a loan has been declined by traditional sources, doesn’t mean it’s the right fit for a bridge lender either. Make sure you understand the unique lending parameters of a bridge lender before submitting a loan. For example, does the property type fit within the lender’s parameters? Does the property need extensive rehab, and if so, does the bridge lender offer financing for rehab properties? Be sure to understand the unique lending parameters and requirements of your chosen bridge lenders before submitting a loan, otherwise you may be barking up the wrong tree!
I typically find that people chose hard money loans instead of conventional loans when they are lacking credit, income or time. Any one of these three will keep a borrower from going to a bank for a loan. One other reason can be the PITB (pain-in-the-butt) factor, because hard money lending actually quite "easy" compared to qualifying at a bank.
Yes we hear that all the time that people just don't want to hassle with the banks, just want to close.
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