Securing the funds for a down payment for a home can be difficult, particularly if you’re purchasing a new home before closing on your old one. A hard money is an excellent financial tool for this situation, but the rates and terms of hard money loans can vary dramatically. Learn more about the various types of hard money loans, lending to an irrevocable trust and other financial options today.
Hard Money Loans for Buying a Home
There are many different types of hard money loans. While some require a down payment, many use collateral backing and don’t require a down payment. Here are the basic types of hard money loans to consider, depending on your financial situation:
- Bridge loans
- Probate and estate loans
- Trust loans
- Fix and flip loans
- Commercial loans
For covering the down payment of your new home, a bridge loan is one of the best options available. A bridge loan uses your current home as collateral and provides you with fast, flexible financing that can help you secure your dream home.
Of course, hard money loans are available for a range of other needs. Invest in a commercial property with a fix and flip loan or use a commercial loan to boost your company’s working capital. Hard money loans are exceptionally flexible, so you can tailor yours to meet your individual financial needs.
Benefits of a Bridge Loan
While bridge loan rates and terms can vary depending on the lender you choose, the best bridge loans for homes don’t require a down payment, have a reasonable interest rate and are flexible enough to use however you wish.
Selling a home can take time. During this period, your dream home can easily slip by. Many sellers in competitive areas aren’t willing to wait for you to sell your first home in order to make an offer on your dream home. With a bridge loan, you won’t be bound by these stipulations and can offer cash for the down payment or an all-cash offer.
Factors to Consider
Of course, every loan type comes with some factors to consider. The interest rate for your bridge loan will be slightly higher than your mortgage. You’ll also have a short repayment window, so if your first home doesn’t sell within a few months you may need to find alternative payment options.
In order to qualify for a bridge loan or other hard money loan backed by your real estate, you must have the available equity. If you’ve paid down your mortgage significantly, you’ll have plenty of free equity to use as backing for your commercial loan. Otherwise, you may not qualify for enough financing to cover your down payment.
Find the Best Bridge Loan Rates Today
Learn more about your hard money options by talking to a local, trusted lender. Find out how you can enjoy your dream home, improve your business working capital or enjoy other benefits with a competitive hard money loan today. Compare bridge loans, trust loans and probate loans California today and enjoy fast funding for your next home or project.