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You can use online hard money loan calculators to estimate your total costs.
Alternatives to working with hard money lenders
If you’re an Orange County homeowner looking to tap into your home’s equity, here are several alternatives to consider:
Take out a second mortgage: With substantial equity in your home, a home equity loan or a home equity line of credit (HELOC) can provide funds at lower interest rates compared to hard money loans.
Cash-out refinance your home: This option lets you refinance your existing mortgage, pulling out cash for new investments, often at a lower interest rate than hard money loans.
Borrow from family or friends: Personal loans from family or friends can offer flexible repayment terms and potentially lower or no interest, making it a more affordable option.
Use a government-backed loan program: Programs like those from the FHA, VA, or USDA assist in purchasing homes with lower down payments and reduced interest rates.
Consider peer-to-peer loans: Provided by individual investors through platforms like Funding Circle, these loans function similarly to hard money loans but often have different terms.
Explore specialized loan programs: Look into specialized loans for fixer-uppers or investment property refinancing if you already have a hard money loan and are looking to replace it.
Request a seller financing option: Sometimes, sellers may agree to finance the purchase themselves, resulting in lower closing costs and less stringent eligibility requirements.
How to buy before you sell
Sometimes, the perfect home pops up on the market when you least expect it. Perhaps it’s a turnkey townhouse in Tustin or a rare mid-century home in Costa Mesa. If you’re an Orange County homeowner looking to buy a new home before selling your current one, HomeLight has a solution that simplifies the process.
The Buy Before You Sell (BBYS) program allows you to use the equity in your current home to make a strong, 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. This program lets you purchase your new home first and then sell your existing home vacant, avoiding the hassle of moving twice.
Here’s how HomeLight Buy Before You Sell works:
Although there’s a flat fee based on your current home’s sale price, the potential savings could be significant. You might save on moving expenses, temporary housing, and even the purchase price of your new home. Plus, HomeLight’s BBYS fees are typically much lower than the interest rates on bridge loans, which currently range from 9.5% to 12%.
