Developers and home builders sometimes have trouble finding financing for their speculative real estate ventures. Traditional financial institutions don't always feel comfortable lending funds for empty retail spaces or spec houses. Tying up cash by making a personal investment may not be feasible. Another possibility for Washingtonians, are the hard money construction loans Seattle lenders will make, if you qualify for them.
Those who have been in the construction business are familiar with these lenders. They already know this is private lending, on a short term basis, not regulated by the Federal Reserve. In order to get the capital you want from a trustworthy source, you need to do your homework. You'll be looking for a lender with a good reputation and a legitimate website.
When you are considering this kind of loan, you should weigh the pros and cons. You can get financing quickly and without all the rules and regulations that may prevent you from bank approval. Most cash advances are for a twelve to twenty month period, and you should be prepared to pay it back with interest. Rates are high, and you will be responsible for fees and closing costs.
If you don't have the best credit, this could be a good option for you. Private lenders are more concerned with the value of your collateral than your credit score. You are going to need to show the architect's renderings, construction budgets, and the contractor's bid sheets. Current comparable sales, market history, and market stability will all factor into the lender's final decision.
Although your collateral is the most important asset in your bid to get a loan, the lender will also be interested in your personal financial history. You may have to give them copies of tax forms, pay stubs, and bank statements. If approved you will probably only get about seventy percent of the total cash investment you need.
Since these transactions don't fall under the Federal Reserve guidelines, the lenders have more leeway in what they expect in the way of repayment, interest, and fees. You need a lawyer to look over the contract before you sign it. If the details aren't spelled out, you should be concerned. You need to look for personal liability and interest accrual paragraphs in the contract.
Since the lender can okay a project within a matter of weeks, you need to have everything in place to start immediately. You have to be prepared to have cash on hand to pay for underwriting fees and closing costs. Contractors, architects, and suppliers need to know what the turnaround time is. If the loan is for twelve months, the project has to be completed and sold by then.
Hard money loans can be good for developers who need fast cash for a short period of time. If you have had financial problems in the past, private lenders are more apt to approve your application than traditional lenders. Being smart about who you are dealing with and what terms you are expected to abide by is the key.
Those who have been in the construction business are familiar with these lenders. They already know this is private lending, on a short term basis, not regulated by the Federal Reserve. In order to get the capital you want from a trustworthy source, you need to do your homework. You'll be looking for a lender with a good reputation and a legitimate website.
When you are considering this kind of loan, you should weigh the pros and cons. You can get financing quickly and without all the rules and regulations that may prevent you from bank approval. Most cash advances are for a twelve to twenty month period, and you should be prepared to pay it back with interest. Rates are high, and you will be responsible for fees and closing costs.
If you don't have the best credit, this could be a good option for you. Private lenders are more concerned with the value of your collateral than your credit score. You are going to need to show the architect's renderings, construction budgets, and the contractor's bid sheets. Current comparable sales, market history, and market stability will all factor into the lender's final decision.
Although your collateral is the most important asset in your bid to get a loan, the lender will also be interested in your personal financial history. You may have to give them copies of tax forms, pay stubs, and bank statements. If approved you will probably only get about seventy percent of the total cash investment you need.
Since these transactions don't fall under the Federal Reserve guidelines, the lenders have more leeway in what they expect in the way of repayment, interest, and fees. You need a lawyer to look over the contract before you sign it. If the details aren't spelled out, you should be concerned. You need to look for personal liability and interest accrual paragraphs in the contract.
Since the lender can okay a project within a matter of weeks, you need to have everything in place to start immediately. You have to be prepared to have cash on hand to pay for underwriting fees and closing costs. Contractors, architects, and suppliers need to know what the turnaround time is. If the loan is for twelve months, the project has to be completed and sold by then.
Hard money loans can be good for developers who need fast cash for a short period of time. If you have had financial problems in the past, private lenders are more apt to approve your application than traditional lenders. Being smart about who you are dealing with and what terms you are expected to abide by is the key.
About the Author:
You can find details about the benefits of taking out hard money construction loans Seattle companies offer at http://www.privatecapitalnw.com/construction-loans right now.
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