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Use online hard money loan calculators to help estimate your costs.
Alternatives to working with hard money lenders
If you’re a homeowner, as opposed to an investor, seeking a way to leverage your current home’s equity, here are some options to consider:
Take out a second mortgage: Leveraging the equity in your home through a home equity loan or a home equity line of credit (HELOC) can provide necessary funds at more favorable interest rates than hard money loans.
Cash-out refinance your home: You can borrow cash to fund new investments by refinancing your existing mortgage. This method often offers lower interest rates and longer repayment terms.
Borrow from family or friends: Personal loans from family or friends can be a viable alternative. They often feature flexible repayment plans and minimal or no interest, making them a more cost-effective solution.
Use a government-backed loan program: Federal programs such as those offered by the FHA, VA, or USDA offer lower down payments and reduced interest rates, which can benefit qualifying buyers.
Consider peer-to-peer loans: Online platforms like Funding Circle connect borrowers with individual investors. These loans can serve a similar function to hard money loans but might offer different terms and conditions.
Explore specialized loan programs: Explore specialized financing options designed for specific purposes, such as fixer-upper loans or investment property refinancing, to find a loan that meets your particular needs.
Request a seller financing option: Some sellers may be willing to finance the sale themselves, offering lower closing costs and more lenient qualification criteria. This can be a convenient alternative to traditional financing.
How to buy before you sell
Sometimes, the perfect home comes on the market when you least expect it. Maybe it’s a charming ranch-style home in Point Loma or a modern condo in Little Italy. If you’re a San Diego homeowner who wants to buy a new home before selling your current one, HomeLight offers an innovative solution that simplifies the process.
The Buy Before You Sell (BBYS) program lets you leverage the equity in your existing home to 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 confidently purchase your next home and then sell your current one vacant, avoiding the inconvenience of moving twice.
Here’s how HomeLight Buy Before You Sell works:
The program charges a flat fee based on your current home’s sold price, but the potential savings can outweigh this cost. You might save on moving expenses, temporary housing, and even secure a better deal on your new home. Additionally, HomeLight’s BBYS fees are typically lower than the interest rates on bridge loans, which currently range from 9.5% to 12%.
