A money lender deals in hard money loans. it is given to someone who has no other sources to attain loans. If you have a poor credit rating, bankruptcy, doubtful payments or late payment history, probably none of the banking institutions would provide you with sufficient monetary resources. In such cases money lenders come to your rescue. Your overall hard money loan can range from $20,000 to $150,000 depending on the overall fund capacity of the money lender.
Loans can be very beneficial in some urgent situations like buying or relocating homes. The real estate industries are witnessing boom because of bridging loans only. Bridging loans are used to purchase new properties while waiting for the current properties to get sold. It is impossible for one to sell the property one owns and purchase another one in a single day. One needs some or the other financial aid in order to acquire a new property altogether. Bridging loans shall assist people in this matter. The organizations shall render short and long term loans depending upon the needs of the people in order to fill up the financial gaps between two transactions.
Description of bridging loans
Bridging loans are different from mortgage loans. Most of them last for 1-2weeks only. The rules and regulations also vary as per the lenders and needs of the person taking a loan. Monthly interests have to be paid before one pays off the full loan. These loans are also called as “fast cash” as they execute immediate financial requirements. These loans are not suitable if one has enough time to manage for long-term loan. Because of interest that the lenders charge for short-term is near about long-term loans only. The security that is provided against the loan decided the credit that will be sanctioned by the organizations.
One has to pay valuation fee, administration fee and legal fee. Not many formalities are required to be fulfilled in order to get these loans. The loan is also beneficial if one needs some money for renovation process of the home.
Two types of bridging loan
Open loan – the interest rate on this loan is lesser as it involves lesser risk to the lender. The person acquiring this loan has a buyer of the home which he wants to sell. Sometimes it happens that the house is already sold and the seller is just waiting for his payment.
Close loan – the rate of interest is quite high as a lot of risks is involved. The person acquiring this loan does not have a buyer of the home till date. The property mortgaged is also of high value in this loan since there is a possibility that the person may not be able to return the loan taken by him.
One can get full information about rules and regulation of this loan over the internet also. A large number of lenders are readily available online who are ready to sanction bridging loans without any hassles.
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