3 Tips When Searching for the Best Interest Rate
Without hard money loans, the real estate world might not be able to move along as quickly as it does. Often, investors or flippers do not have the funds to acquire a piece of real estate or property that has the potential to make a big sale. As such, they must attain a loan, but acquiring a traditional loan can take too long, and in the meantime, someone else can swoop in. That is where hard money loans come in to help, but while they are easier to attain, they usually have higher interest rates. Here are your three tips when searching for the best interest rates.
Loan-to-Value Ratio
To understand the interest rate, you must understand the loan-to-value ratio (LTV). An LTV is a measure of the property’s appraised value in relation to the amount you want to borrow. Your lender will use the LTV to help them ascertain the risk and whether they want to proceed. If you are searching for the best interest rate, you must ensure the appraised value of the property is high, as this will likely result in a low LTV and better rates.
Don’t Go for Low
Of course, we all want the lowest interest rate we can attain, but you want to be cautious of rates that seem too good to be true because they likely are. The best interest rates are those that are reasonable, true to the property’s value, and from trustworthy lenders. At Streamline Mortgage Corporation, we are private lenders in Nevada that you can put your trust in and who are ready to work with you. We want to help you acquire the property you want as soon as possible so you can start on your project with no delay.
High Credit Score
One of the first things lenders will look into, among other things, is your credit score, which significantly determines the value of your interest rate. As such, before seeking a hard money loan, you must check your credit score. The higher your credit score, the more likely lenders will provide you with a better interest rate.