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There are many online hard money loan calculators available to estimate your costs.
Alternatives to working with hard money lenders
Hard money lenders aren’t the only option when you need fast or flexible real estate financing. Depending on your timeline, credit profile, and investment goals, there are several alternatives that may offer lower costs or different terms. Below are common financing options to consider before committing to a hard money loan.
Take out a second mortgage: A home equity loan or a home equity line of credit (HELOC) allows you to tap into your home’s equity, often at lower interest rates than hard money loans.
Cash-out refinance your home: This approach lets you refinance your existing mortgage, taking out cash based on your home’s current value. It usually offers better rates than hard money loans.
Borrow from family or friends: Getting a loan from family or friends can provide flexible terms and potentially lower interest rates, making it a cost-effective option.
Use a government-backed loan program: Loans from the FHA, VA, or USDA can help with lower down payments and more favorable interest rates.
Consider peer-to-peer loans: These loans are funded by individual investors via online platforms, offering terms that might be more advantageous than those of hard money lenders.
Explore specialized loan programs: Look into loans designed for fixer-uppers or investment property refinancing, which can replace a hard money loan with better terms.
Request a seller financing option: Some sellers are willing to finance the purchase directly, which can reduce closing costs and offer more lenient eligibility requirements.
How to buy before you sell
Sometimes, the perfect home hits the market when you’re not quite ready to sell your current one. Perhaps it’s a modern three-bedroom bungalow in Grand Rapids or a rare mid-century modern home in Kalamazoo. If you’re a Michigan homeowner who wants to buy a new home before selling your current one, HomeLight offers a streamlined solution.
The Buy Before You Sell (BBYS) program allows you to tap into the equity of your existing home and make a stronger, non-contingent offer on a new property. If your home qualifies, you can get your equity unlock amount approved within 24 hours, with no cost or commitment required. Once approved, you can purchase your new home confidently, then sell your current home vacant, avoiding the inconvenience of moving twice.
Here’s how HomeLight Buy Before You Sell works:
While BBYS comes with a flat fee based on your current home’s sale price, the potential savings in other areas could outweigh the cost. For instance, you might save on moving expenses, temporary housing, and possibly even the purchase price of your new home. Additionally, HomeLight’s BBYS fees are typically much lower than the interest rates on hard money loans, which range from 9.5% to 12%.
