When it comes to real estate financing, California borrowers have a lot of options to choose from. However, some mortgage programs are more accessible than others, and while not everyone can qualify for a traditional home loan, a hard money loan is something attainable for many borrowers.
Hard money lenders in California offer unique real estate financing programs that offer several key advantages over other types of home loans. Nevertheless, figuring out how to get a hard money lender can sometimes prove challenging.
Every hard money lender in California is a little different, from the programs they offer to the service they provide. For example, a hard money lender in Los Angeles may have a different set of requirements than a hard money lender in San Diego.
When deciding how to get a hard money lender, its important to find a provider who checks off all the boxes and that can help support your financial objectives. If you are considering a new hard money loan but are stuck searching for a sufficient lender, here are some things to consider when looking at how to get a hard money lender.
What is a Hard Money Lender?
Hard money lenders in California are independent private investors, companies, or organizations that offer real estate loans to consumers. Hard money loan programs are a little different than traditional mortgage solutions offered by institutional lenders such as banks and credit unions, making them a great alternative for California borrowers.
How to get a hard money lender often depends on your unique financing strategy. Several hard money lenders specialize in only certain kinds of hard money real estate loans. Thus, some hard money loan programs might benefit you more than others.
Nevertheless, hard money lenders in California universally employ an asset-based approach to lending which emphasizes the value of the property being used as collateral rather than scrutinize a borrower’s employment history or credit score.
What to Expect From Hard Money Lenders in California?
A key feature in understanding how to get a hard money lender is knowing how a hard money loan works. As mentioned, hard money loans are a little different than traditional mortgage solutions, so knowing upfront what to expect from hard money lenders in California can be extremely beneficial.
Interest Rates
Interest rates should definitely be a consideration when shopping for a new home loan. Hard money loans often have higher interest rates compared to traditional mortgages. But to be fair, hard money loans also come with a myriad of other benefits that offer better overall value to borrowers that use them. Some of these benefits include fewer qualifying requirements, greater flexibility, and faster approval decisions.
Loan Duration
If you want to know how to get a hard money lender, it’s important you understand how hard money loan durations compare to traditional mortgage loans. Hard money loans are considered short-term financing, meaning loan durations are between 1 and 3 years. This is significantly different than traditional mortgages which can have loan durations extending anywhere from 15 to 30 years.
Loan-to-Value (LTV) Ratios
How to get a hard money lender can often depends on how much money you need to borrow. How much you can borrow often depends on how much you currently owe on your home and what your California property is worth.
One of the key factors that hard money lenders in California consider when approving you for a new hard money loan request is the loan-to-value (LTV) ratio. Loan-to-value ratio requirements can vary between hard money lenders. Generally hard money lenders in California require a loan-to-value ratio of 60% to 70%.
Approval Requirements
Borrowers that are having trouble or that cannot get approved for a traditional real estate loan often look at how to get a hard money lender. That’s because hard money lenders in California have less restrictive qualifying criteria than institutional lenders.
Banks and credit unions impose hefty requirements that borrowers must meet in order to qualify for financing. These include factors such as a maximum debt-to-income (DTI) ratio and minimum credit score requirements.
Conversely, hard money lenders in California utilize an asset-based approach to real estate lending. This allows California hard money lenders to focus less on borrower characteristics such as credit score or employment history, making hard money loan programs more accessible.
Application Process
Hard money lenders in California have a streamlined application process compared to traditional lenders. That’s because, in part, hard money lenders in California have fewer approval requirements, allowing them to approve a hard money loan in minutes. You won’t have to complete extensive paperwork or provide a trove of financial documentation, making for a better customer experience.
Six Helpful Tips For How to Get a Hard Money Lender in California
If you are unsure how to get a hard money lender in California, there are some things you can do to help identify the best hard money lender for your credit scenario. Here are a few steps to you can take and considerations you can make when exploring how to get a hard money lender in California.
Tip #1 – Understand How a Hard Money Loan Works
The first step to figuring out how to get a hard money lender in California is to have a thorough grasp of how hard money loans work as a whole. Knowing what to expect from hard money lenders in California will save you time exploring the wrong type of loan programs and providers.
Tip #2 – Find a Hard Money Specialist
When exploring how to get a hard money lender, you should hone in on hard money lenders in California that specialize in hard money loan programs that meet your specific needs. You want a hard money lending specialist that focuses exclusively on hard money lending, so that you know they can skillfully navigate you through the complexities involved with non-traditional financing.
Tip #3 – Keep Your Search Local
Hard money loans are in high demand. Borrowers have more choices than ever before. But its important to find a provider that is an expert in the local California real estate market. When sorting through how to get a hard money lender, it would be wise to stay clear of national or out-of-state providers. These hard money lenders often lack the expertise and knowledge of local market trends.
Tip #4 – Look For the Best Overall Value
There are several factors to consider when securing a new hard money loan. Price is certainly a concern that sits at the forefront of most people’s minds. Specifically, borrowers tend to fixate on interest rates without examining a loan’s overall value. When looking at how to get a hard money lender, put equal consideration on favorable features such as speed of funding, fewer approval requirements, and personalized service.
Tip #5 – Seek Referrals
One of the best ways for how to get a hard money lender is to seek referrals from other reputable industry professionals. Consider seeking California hard money recommendations from other real estate investors, real estate agents, and title companies who have favorable working relationships with California hard money lenders in your area.
Tip # 6 – Examine Lender Reviews
When looking at how to get a hard money lender, one of the best things you can do is examine a lender’s past client reviews and testimonials. Check for top-rated feedback on sites like Google and Zillow to gauge the experience past client’s have had. Similarly, look up a lender’s rating with the Better Business Bureau (BBB). This can give you valuable insight into a lender’s reputation and quality of service.
Hard Money Lenders in California, Independent Lending
Deciding the best route for how to get a hard money lender in California can often leave you feeling frustrated. But once you understand how hard money loans work and what to expect from California hard money lenders, choosing the right hard money lender in California will be a breeze.
Independent Lending is your local California hard money lending specialist who has proudly facilitated over $500 million in mortgage lending over the last decade. Our team offers flexible hard money loan programs that leverage an asset-based approach to lending and are tailored to meet your specific real estate objectives.
With an A+ rating with the BBB and hundreds of 5-star reviews on Google and Zillow, once you discover Independent Lending you won’t have to wonder how to get a hard money lender anymore. Contact us today to discover how we can support your real estate goals!
