If you are like many first time buyers, you are probably looking for that dream home with not so great credit, which can definitely be a stumbling block. Of course, if you are a savvy first-time buyer you may be wondering about the world of hard money loans, California especially.
When setting out to buy a new home or rather your first you may feel lost when it comes to the lending process, specifically when researching hard money loans. California lenders of hard money often work with a standard borrower base, which can also be misleading. For instance, if you choose to fix and flip a house, start a business, have a construction project or are looking own a multi-family property then hard money is often the solution.
But, you are a first-time home buyer looking for a place to live and settle down in, thus, you may be thinking that you can’t benefit from hard money loans. California lender, however, will tell you otherwise. The truth is you can, as a first-time home buyer, benefit from hard money financing. You do, however, need to know how hard money works in your particular situation.
For instance, hard money financing is great for short time financing and you can typically expect about somewhere around 65% of the value of the home you are trying to purchase. So what does that mean for you? Well, if you have turned to hard money financing because of not-so-stellar credit then hard money is an opportunity for you to improve your credit and still get your dream home. Think about it this way, hard money financing generally needs to be paid back within six months to a year, therefore, you have six months to a year to raise your credit score and find long-term financing.
Sure, you may be wondering how hard money financing under these limitations is truly a win-win solution. Well, the reality is hard money financing is most borrowers last resort for a variety of pertinent reasons—some good and some bad. Thus, if you absolutely need that home right now and have a solid plan of how to improve your credit score while finding long-term financing then what is stopping you. Remember, real estate professionals use hard money financing as a stepping stone all the time so you can too.
Small Piece of Advice
Nevertheless, before you go looking for lenders that offer hard money financing, it is important to remember that nothing comes easy or in this case cheap. Your hard money financing is short-term financing for a reason—there are fees, interest rates and more that making finding long-term financing an absolute must. In other words, you may have literally got your foot in the door, but you need to make sure that you move quickly in order to keep your cost down. Lastly, you will need to have that remaining 35% for purchasing your home. Therefore, you need to think long and hard about how quickly you need to move on purchasing that dream home.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.