Need A Hard Money Loan? Know The Answers To These Questions Before You Apply
If you want to buy an investment property, a hard money loan can help. This is especially true if you want to buy a fixer-upper. When you buy an investment property, you may need to put a lot of money into the renovations. If you don't have the cash on hand, you'll need a different way to pay for those renovations. That's where a hard money loan comes into the picture.
A hard money loan gives you the cash you need to restore your investment property. Once you sell the property, you pay back the loan. But, you do need to prepare for the loan process. If you've never applied for a hard money loan, read the list provided below. These are the questions your lender will be asking when deciding on your qualifications for a hard money loan.
Do You Have Available Equity?
If you want to apply for a hard money loan, the first thing you need to look at is your equity. Most hard money lenders will want to see that you have equity in the property you want to renovate. Equity is something that lenders can attach if you fail to pay back the loan. Before you apply for your hard money loan, take the time to document any equity you have in your property.
Do You Have Cash on Hand?
If you need a hard money loan, take a look at your cash supply. Your lender might ask about the cash you have on hand. You'll need to make payments on your investment property while you're doing the renovations. Cash on hand lets lenders know that you can make those payments. If you don't have adequate savings, you might want to wait for your hard money loan.
What is Your Credit Score?
If you're ready to apply for a hard money loan, be sure to check your credit score. One of the benefits of a hard money loan is that you don't need perfect credit. But, you do need a fair credit score. If your credit score doesn't fall into the fair credit range, you might not qualify for a hard money loan. If that's the case, take some steps to bring your credit score up before applying.
Don't miss out on the opportunity to buy your first investment property. Use the tips provided here to make sure you qualify for your hard money loan.