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You can use online hard money loan calculators to estimate your hard money loan costs.
Alternatives to working with hard money lenders
If you’re a Boston homeowner looking to leverage your home’s equity, here are some alternatives to hard money loans to consider:
Take out a second mortgage: A home equity loan or a home equity line of credit (HELOC) allows you to borrow against your home’s equity, often with lower interest rates compared to hard money loans.
Cash-out refinance your home: This option lets you refinance your existing mortgage and take out cash, typically at lower rates than hard money loans.
Borrow from family or friends: Loans from family or friends can offer flexible terms and potentially no interest, making it a cost-effective option.
Use a government-backed loan program: Programs from the FHA, VA, or USDA provide low down payments and reduced interest rates for eligible buyers.
Consider peer-to-peer loans: Peer-to-peer lending platforms connect you with individual investors offering loans, often with terms differing from traditional hard money loans.
Explore specialized loan programs: Look into loans tailored for fixer-uppers or investment property refinancing, which can replace an existing hard money loan.
Request a seller financing option: Some sellers may finance the sale themselves, offering lower closing costs and more lenient eligibility requirements.
How to buy before you sell
Sometimes, the perfect listing appears when you’re not even looking. Maybe it’s a single-family home in Allston with a spacious backyard or a two-bedroom condo in East Boston with picturesque harbor views. If you’re a Boston homeowner aiming to buy a new home before selling your current one, HomeLight offers an innovative solution to make the process smoother.
The Buy Before You Sell (BBYS) program allows you to leverage the equity in your current home to make a stronger, non-contingent offer on a new property. With this program, you can get your equity unlock amount approved within 24 hours, with no cost or obligation. This allows you to purchase your next home confidently and then sell your current one vacant, avoiding the inconvenience of moving twice.
Here’s how HomeLight Buy Before You Sell works:
While there is a flat fee based on the current home’s sold price, the potential savings in other areas can outweigh this cost. You might save on moving expenses, temporary housing, and even the purchase price of your new home. Moreover, HomeLight’s BBYS fees are generally lower than the interest rates on bridge loans, which currently range from 9.5% to 12%.
