Many experts are predicting that the housing crisis is nearing it’s bottom. This is great news for not only the US economy but also the major economies around the world.
What this also means is that profit takers are looking to get in before the doors slam shut on a historic buying opportunity in not only Florida but the entire U.S. One of the main reasons that the financial downturn has lasted this long is because conforming lenders have all but forgotten about the real estate investor. Last year conforming lenders implemented a guideline stating that anyone with more than four properties financed is no longer eligible for conforming financing. It doesn’t matter how much money you make or how good your credit is, banks WILL NOT lend to investors with more than four properties. This has left many investors stuck between a rock and a hard place.
Investors realize that now is the time to be buying properties. Most investors are picking up bank owned properties for pennies on the dollar however a huge percentage of these investors don’t have enough capital to purchase these properties cash.
ENTER HARD MONEY LENDERS
This is where florida hard money lenders have become so important to this situation. Private investors don’t have to follow conforming guidelines and are able to extend financing to investors looking to purchase or even to refinance their current properties in order to bolster their investing funds available to them. Hard money loans allow for up to 70% loan to value on refinances of properties that are free and clear or have a lower loan amount to payoff. This is allowing investors to help soak up the excess housing inventory which will bring a floor to the market much sooner than if they could not buy these properties up.
Hard money lending is now in huge demand despite it’s downfalls. Even though hard money loans carry a higher interest rate (typically 8.99%-12%) investors can still realize huge profits with the assistance of this hard money financing. Hard money loans can be short term (12 months) to fully amortized 30 year fixed loans depending on the needs of the hard money client. Many mortgage companies find themsevles unable to compete in this market because they are so focused on cranking out the FHA loans which are so popular today. We have found it a boon to not only our business to but to our clients to offer another backup solution in case conventional, VA, or FHA financing falls through or if guidelines don’t permit.
Florida hard money loans are not for everyone, but there can be no doubt that the hard money lending market is vital part of the current financial markets we find ourselves in. For more information about hard money loans please viit our hard money loanswebpage.
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