Hard Money Lenders Fort Worth: Fast Funds Explained

What are hard money loans used for?

Hard money loans in Fort Worth can be utilized for various real estate endeavors. Here’s a closer look at some common scenarios where these loans are beneficial:

Flipping a house: Investors often use hard money loans for flipping homes. These loans provide quick financing to purchase and renovate properties, allowing flippers to sell at a profit.

Buying an investment rental property: Hard money loans can help investors acquire rental properties. The fast funding and flexible terms make it easier to secure properties that can generate rental income.

Purchasing commercial real estate: Hard money loans offer a viable solution for those looking to buy commercial real estate. The quick turnaround can be important for seizing opportunities in the competitive commercial market.

Borrowers who can’t qualify for traditional loans: Individuals who struggle to qualify for conventional loans due to credit issues can benefit from hard money loans. These loans focus more on the property’s value than the borrower’s credit history.

Homeowners facing foreclosure: Hard money loans can be a lifeline for homeowners facing foreclosure. The quick access to funds can help them avoid losing their homes and give them time to stabilize their financial situation.

How much do hard money loans cost?

The cost of hard money loans is typically higher than traditional loans due to the increased risk lenders undertake and the convenience of quick, less restrictive funding.

Here are some typical costs associated with hard money loans:

• Interest rates: These can range from 8% to 15%, depending on the lender’s risk assessment.
• Origination fees: Lenders may charge 1% to 5% of the total loan amount as an origination fee.
• 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 many online calculators available on the Internet to give you an idea of your costs.

Alternatives to working with hard money lenders

If you’re a homeowner, rather than an investor, looking for a way to leverage your current home’s equity, here are a few options to consider:

Take out a second mortgage: If you have substantial equity in your home, a home equity loan or home equity line of credit (HELOC) can provide the needed funds at a lower interest rate compared to a hard money loan.

Cash-out refinance: This option allows you to refinance an existing property, pulling out cash to finance your new investment. It often comes with lower interest rates than hard money loans.

Borrow from family or friends: A personal loan from family or friends can offer flexible repayment terms and potentially lower or no interest rates, making it a more affordable option.

Use a government-backed loan program: Programs offered by the FHA, VA, or USDA can help buyers purchase homes with lower down payments and reduced interest rates.

Peer-to-peer loan: These loans are provided by individual investors through lending platforms like Funding Circle. They function similarly to hard money loans but often have different terms.

Specialized loan programs: If you already have a hard money loan and want to replace it, consider specialized loans for fixer-uppers or investment property refinancing.

Request a seller financing option: In some cases, sellers may agree to finance the purchase themselves, resulting in lower closing costs and less stringent eligibility requirements.

How to buy before you sell

Sometimes, the perfect listing pops up when you’re least expecting it. Maybe it’s a rare mid-century modern home or a two-bedroom condo within walking distance of your job.

If you’re a Fort Worth homeowner wanting to buy a new home before selling your current one, HomeLight offers an innovative solution that streamlines the process.

The Buy Before You Sell (BBYS) program allows you to leverage the equity in your existing home to make a stronger, non-contingent offer on a new property. If your home qualifies, you can get your equity unlock amount approved in 24 hours or less, with no cost or commitment required. Once approved, you can confidently purchase your next home and then sell your current one vacant, avoiding the hassle of moving twice.

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 you could see 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. On top of that, HomeLight’s BBYS fees are typically much lower than the interest rates on bridge loans, which currently range from 9.5% to 12%.

3 top hard money lenders in Fort Worth

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 Fort Worth.

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 Fort Worth?

If you’re weighing the options for financing your next real estate venture in Fort Worth, you might wonder if a hard money loan is the right choice. These loans are ideal for real estate investors who need quick financing for short-term projects.

They offer flexibility and faster funding compared to traditional loans, which can be important for seizing investment opportunities in Fort Worth’s competitive market.

Hard money loans are particularly beneficial for house flippers, rental property investors, and those purchasing commercial real estate.

However, the higher interest rates and fees mean they may not be the best option for everyone. It’s important to weigh the costs and benefits carefully.

HomeLight’s Buy Before You Sell program might be a better fit if you’re a homeowner looking to leverage your equity. This program allows you to move into your new home before selling your current one, offering a smoother and less stressful transition.

Whether you choose a hard money loan or an alternative like HomeLight’s program, being informed will help you achieve your objectives efficiently.

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