Reasons to Choose Hard Money Lending Programs
Aug 23, 2016
When the opportunity presents itself to expand on your real estate holdings, and you don’t have the full purchase price on hand, there are basically two options. One is to approach a bank about getting a traditional loan in order to purchase the property. The other is to find a private money commercial lender that will be able to loan you the money fast based on the value of the property.
On the surface, getting money from a bank look good. Interest rates are normally lower and the process is familiar. However, there are drawbacks with working with a bank if you are pressed for time or if you do not fit nicely into their lending guidelines. Getting a loan from a bank requires good credit scores and full disclosure of your financial ability to pay back the loan. This would include, but not be limited to, providing the past two years tax returns, signing a 4506 form so the lender can verify your tax returns against those reported to the IRS, your most recent bank statements, and W2’s and pay stubs - just to name a few. The bank's loan process can be time-consuming, and at the end of it all, there’s no guarantee you will even get the loan. Many find that hard money loans offer a preferable solution for commercial mortgage financing.
Don’t Worry About Your Credit Score
When you apply for a commercial loan with a bank or conventional lender, the first thing they do is run your credit report. If your credit score isn’t at least 680, the loan isn’t going to happen. With hard money commercial lending programs, your credit score only determines your interest rate, not if you will qualify or not. In many ways, these hard money loans are actually quite “old school,” because they look at the value of your existing property assets as a way of determining how much to loan you. They also look at the property you want to purchase or refinance, and base the loan on the properties appraisal. With some commercial hard money lenders, that percentage can be as high as 65% of the potential value.
More Straightforward, Less Time-Consuming Process
When you apply for a real estate loan at a bank, even with good credit, the loan process can be cumbersome and still take months to complete. You may need to track down old tax returns, pay stubs or other income receipts, and possibly present references. When you identify an investment property with upside potential, you can’t waste any time gathering all that information. That property will more than likely attract multiple interested buyers and the ability to close quickly is an advantage to a buyer. Commercial hard money lenders, like Riverdale Funding, have a streamlined loan process and money readily available to lend.
Need Commercial Mortgage Financing? Riverdale Can Help
Commercial mortgage financing terms at Riverdale Funding, LLC have competitive rates and are typically 1-3 years, giving you time to generate income to pay off the loan and move on to your next project.
Riverdale Funding is a leading hard money lender with years of service to the commercial real estate community. Our application is a single page you fill out online along with a picture of the property you wish to purchase or refinance. Based on that information and whether the property meets our clearly explained set of criteria, we can provide commercial mortgage financing from $250,000 to $5 million and above. We provide our borrowers with the flexibility to close quickly on time-sensitive commercial real estate transactions and available financing to fund loan request most other lenders take a pass on.