Best Financing Options for Fix-and-Flip Projects
Hard money loans are widely regarded as one of the best financing options for fix-and-flip projects. Hard money loans are short-term funding options provided by private lenders rather than by banks. They’re secured based on a property’s value or potential value. These loans offer many benefits for fix-and-flip investors, such as flexible terms and loose approval requirements. Perhaps their most notable advantage, however, is their quick approval time. Borrowers can often receive funding for hard money loans in just a couple of days—this is ideal for fix-and-flip investors, who often operate on tight time constraints.
Balloon mortgage loans
Another beneficial financing option for fix-and-flip investors is a balloon mortgage loan. The terms of a mortgage loan require borrowers to make relatively small monthly payments for a set period of time. Once the duration of the loan is up, its entire remaining balance is due. Essentially, balloon mortgage loans are any type of mortgage where the amount of the final payment is over twice the amount of any of the previous monthly payments. The final loan payment may be large, but most balloon mortgage loans typically take around five to seven years to mature. Most fix-and-flip investors sell their properties before the final payment is due, so they can enjoy the lower interest rates and monthly payments of balloon mortgage loans without much risk.
Hybrid ARMs
Hybrid ARM loans provide the benefits of adjustable-rate mortgages and fixed-rate mortgages. In addition to offering lower interest rates, they also allow borrowers to enjoy fixed monthly payments for longer periods of time—typically three, five, or seven years, depending on the terms of the loan. People who plan on selling their homes quickly can take advantage of the smaller upfront payments and avoid the adjustable rate mortgage period of a hybrid ARM. As such, hybrid ARMs are ideal financing options for fix-and-flip investors who plan on selling their properties before or shortly after the fixed-rate period of the loan ends. Streamline Mortgage is a leading hard money lender in Las Vegas and Reno. We offer each of these beneficial financing options for fix-and-flip projects. To get the financing you need, apply online or contact us for more information today.]]>