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Online hard money loan calculators can help you estimate these costs.
Alternatives to working with hard money lenders
If you’re a homeowner looking to tap into your current home’s equity, here are a few alternatives to consider:
Take out a second mortgage: If you’ve got a lot of equity in your home, tapping it through a home equity loan or a home equity line of credit (HELOC) can give you funds at a better interest rate than a hard money loan.
Cash-out refinance your home: By refinancing your existing mortgage, you can pull out cash to fund your new venture, often with better interest rates compared to hard money loans.
Borrow from family or friends: Personal loans from relatives or friends can offer more flexible repayment terms and potentially lower or no interest rates, making them an affordable option.
Use a government-backed loan program: FHA, VA, or USDA programs can help you purchase homes with lower down payments and reduced interest rates, making homeownership more accessible.
Consider peer-to-peer loans: These loans come from individual investors via platforms like Funding Circle, providing an alternative to traditional loans with different terms and conditions.
Explore specialized loan programs: Explore loans tailored for fixer-uppers or investment property refinancing, which can replace a hard money loan with better terms.
Request a seller financing option: Sometimes, sellers are willing to finance the purchase themselves, which can lead to lower closing costs and less stringent eligibility requirements.
How to buy before you sell
When the perfect home suddenly appears on the multiple listing service (MLS), timing can be crucial. Perhaps it’s a remodeled ranch in North Central or a historic loft in Downtown Phoenix. If you’re a Phoenix homeowner eager to buy a new property before selling your current one, HomeLight has a solution to simplify the process.
HomeLight’s Buy Before You Sell (BBYS) program allows you to use your home’s equity to make a strong, non-contingent offer on a new house. Once your home qualifies, you can get approval for your equity unlock amount within 24 hours, with no upfront costs or other obligations. This approval lets you purchase your next home with confidence and sell your current one vacant, eliminating the hassle of moving twice.
Here’s how HomeLight Buy Before You Sell works:
While BBYS carries a flat fee based on the sale price of your current home, the potential savings in other areas can offset this cost. You might save on moving expenses, avoid temporary housing, and secure a better deal on your new home. Additionally, HomeLight’s BBYS fees are generally lower than bridge loan interest rates, which typically range from 9.5% to 12%.
3 top hard money lenders in Phoenix
If you’re looking to move fast on real estate investments in Phoenix, hard money lenders can be a real advantage. They offer quick funding and flexible terms that traditional banks often can’t match. Here are three top hard money lenders in Phoenix to consider.
