Use online calculators to estimate these costs and plan accordingly.
Alternatives to working with hard money lenders
If you’re a homeowner looking for ways to leverage your home’s equity, here are a few practical alternatives to hard money loans:
Take out a second mortgage: Consider a home equity loan or HELOC for funds at lower interest rates than hard money loans.
Cash-out refinance: This allows you to refinance your property and pull out cash, typically with lower interest rates.
Borrow from family or friends: Loans from family or friends can offer flexible repayment terms and lower or no interest rates.
Use a government-backed loan program: Programs like FHA, VA, or USDA provide assistance with lower down payments and reduced interest rates.
Peer-to-peer loan: Platforms such as MeridianLink or Funding Circle offer loans similar to hard money loans but with potentially different terms.
Specialized loan programs: Explore loans for fixer-uppers or investment property refinancing to replace existing hard money loans.
Request a seller financing option: Some sellers may finance the purchase themselves, offering lower closing costs and easier eligibility requirements.
How to buy before you sell
Sometimes, your dream home comes on the market when you least expect it. Maybe it’s a historic two-story craftsman or a spacious suburban house with great schools nearby. If you’re a St. Louis homeowner wanting to buy a new home before selling your current one, HomeLight offers a seamless solution with the Buy Before You Sell program.
Buy Before You Sell (BBYS) lets you leverage your current home’s equity to make a competitive, non-contingent offer on a new property. If your home qualifies, you can get approval for your equity unlock amount within 24 hours with no cost or commitment. This approval allows you to buy your next home with confidence and sell your current one vacant, avoiding the stress of moving twice.
Here’s how HomeLight Buy Before You Sell works:
Although the program has a flat fee of 2.4% of your current home’s sale price, it can potentially save you money in other areas like moving expenses, temporary housing, and the final purchase price of your new home. Plus, HomeLight’s BBYS fees are typically much lower than the interest rates on bridge loans, which currently fall between 9.5% to 12%.
