If you want to buy real estate as an investment or you would like to flip a house, you may need to line up financing quickly before someone else snags the property. That can be difficult with a traditional lender. Before a company approves an application for a conventional loan, it typically reviews information on a borrower’s income, debt, and credit history. The process often takes weeks.
You can secure funding much faster through a hard money loan, which is based on a borrower’s assets. Hard money loans have shorter repayment periods and higher interest rates than conventional loans.
Hard money lenders have less stringent requirements than conventional lenders and don’t require as much documentation. Even so, there are a handful of documents that you will have to provide to secure a hard money loan.
Documentation Required for a Hard Money Loan
If you want to get funding to buy a property, you will need to present a purchase contract. It should include information on the property that you plan to purchase, the sale price, and the anticipated closing date.
If you plan to use a property that you currently own as collateral and you have an outstanding mortgage on it, you will have to provide documentation related to that loan. That should include the payment terms, interest rate, and other key information.
Before a hard money lender gives you a loan, you will have to provide proof that the property is insured. That can give the lender confidence that it will be compensated in the event of a loss.
You will have to purchase title insurance to protect both you and the lender in case someone else claims to have an ownership stake in the property. If that happens, the title insurance company will handle the issue.
If you plan to renovate and sell the property, you should provide information on your renovation budget and how much you expect to sell the property after it has been fixed up. You may also have to submit documentation showing that you have access to funds to be used for renovations.
Apply for a Hard Money Loan
When purchasing real estate, it’s often necessary to act quickly to beat the competition and snatch up a desirable property. Sachem Lending can review your application and may be able to get you the funds you need in a matter of days so you can purchase an investment property. Contact us today to learn more or to submit an application.