If you’re considering buying a house, renovating it, and selling it for a profit, you will likely need a loan in order to finance the process. Even “fixer-upper” homes can be expensive, and getting funding to flip a house can be difficult if you go with a more traditional loan through a bank. That’s why using private loan programs is a great way to ensure that you’re getting the financial help you need for your house flip. Below is more information on how private loan programs can benefit your house flipping endeavor.
Hard Money Loans Are Perfect For House Flipping
A hard money loan is a loan that uses collateral as a back up as opposed to looking at your credit or financial history. This is what makes hard money loans so perfect for house flipping – the collateral is a part of the deal. With the house that you’re renovating being used as collateral, you won’t have to worry about whether or not a traditional loan would be given to you.
You Don’t Have to Worry About Your Credit
Since private hard money loans aren’t about your credit score, you can get a loan that you may not be approved for on a traditional route. Many banks believe house flipping to be a risky investment that may not be paid back, which can make getting a mortgage for your flipping project difficult. Since hard money private loans have collateral involved, private money lenders find them to be less risky than a traditional loan. This means that you’ll actually get the financial help you need with a private loan.
Private Loans Can Be Considered On a Case-By-Case Basis
Many times traditional loans come with rigid standards that have to be met in order to even be considered for a loan. On the other end of things, private loan programs are able to evaluate each loan application they receive on a case-by-case basis, meaning that you may get a loan you wouldn’t have been considered for in a traditional setting.
If you’re looking into securing a mortgage for your next house flip, you should consider looking into private loan programs near you. Make sure to discuss all the options with your private loan company. Ask about the LTV ratio for your potential loan, which usually sits in the 60% to 80% range. If you’re interested in a private loan in California, make sure to contact GW Private Capital today for more information!