Hard Money Lenders Colorado Springs: Fast Financing Solutions

What are hard money loans used for?

Hard money loans can be a good tool, depending on your situation. Here are some common examples:

• Flipping a house: Ideal for those flipping homes who need quick funds to purchase and renovate properties.
• Buying an investment rental property: Useful for acquiring rental properties that might not qualify for traditional financing.
• Purchasing commercial real estate: Can be leveraged to buy commercial properties when traditional loans fall short.
• Borrowers who can’t qualify for traditional loans: This is a viable option for those with less-than-perfect credit who still want to invest in real estate.
• Homeowners facing foreclosure: Can provide fast funds to avoid foreclosure and potentially save their homes.

How much do hard money loans cost?

The cost of hard money loans is generally higher than traditional loans due to the increased risk and convenience. These costs can include:

• Interest rates: These can range from 8% to 15% or higher, depending on the lender’s risk assessment.
• Origination fees: Lenders may charge an origination fee of 1% to 5% of the total loan amount.
• Closing costs: Additional fees at closing can include legal fees, appraisal fees, and other administrative costs.
• Points: Lenders might charge points (a percentage of the loan amount) upfront, which can add to the initial cost of obtaining a loan.

There are also online calculators available to help you estimate costs.

Alternatives to working with hard money lenders

If you’re a homeowner or investor considering different funding options, here are a few alternatives:

• Take out a second mortgage: Home equity loans or lines of credit can provide needed funds at lower interest rates.
• Cash-out refinance: Refinance an existing property to pull out cash for new investments.
• Borrow from family or friends: Personal loans from family or friends can offer flexible repayment terms and potentially lower or no interest rates.
• Use a government-backed loan program: FHA, VA, or USDA loans can help you purchase homes with lower down payments and reduced interest rates.
• Peer-to-peer loan: Loans provided by individual investors through platforms like Funding Circle, often with different terms.
• Specialized loan programs: Consider specialized loans for fixer-uppers or refinancing investment properties.
• Request a seller financing option: Sellers may agree to finance the purchase, resulting in lower closing costs and less stringent eligibility requirements.

How to buy before you sell

HomeLight’s Buy Before You Sell program offers a seamless way to buy a new home before selling your current one. This program allows you to make a competitive offer on a new home with HomeLight’s backing, ensuring you don’t miss out on your dream property.

Benefits include avoiding the stress of selling your home first, moving at your own pace, and potentially receiving up to 90% of your home’s current value to use as a down payment.

The costs for this program can vary, but interest rates range generally from 9.5% to 12%. By using this program, you can comfortably transition to your new home without the pressure of simultaneous buying and selling.

Here’s how HomeLight Buy Before You Sell works:

Although there’s a flat fee of 2.4% of your current home’s sold price, the potential savings in other areas might outweigh the cost. For example, you might save on moving expenses, temporary housing, and even the final purchase price of your new home.

Traditional lenders might not be the solution for every real estate investment. If you’re looking to move quickly and capitalize on an opportunity, explore the hard money lending options available in Colorado Springs.

Investing in real estate?

Hire an investor-friendly real estate agent who can help you get access to off-market properties at a discount and assess potential rental income based on market trends. HomeLight can connect you with investment property specialists at no cost.

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Should I partner with a hard money lender in Colorado Springs?

Hard money loans are often best for real estate investors who need quick access to funding for property flips or investment projects. They offer flexibility and speed, which are essential in a competitive market like Colorado Springs. The decision to utilize this kind of funding will depend on your needs.

However, if you’re a homeowner looking to leverage your equity, HomeLight’s Buy Before You Sell program might be a better fit. By working with HomeLight, you can buy a new home before selling your current one, providing a smoother transition.

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