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Use online hard money loan calculators to estimate your total costs.
Alternatives to working with hard money lenders
If you’re a homeowner looking to tap into your current home’s equity, consider these alternatives to a hard money loan:
Take out a second mortgage: If you have significant equity in your home, a home equity loan or home equity line of credit (HELOC) can offer the needed funds at a lower interest rate than a hard money loan.
Cash-out refinance your home: This method allows you to refinance an existing property, pulling out cash to fund your new investment. It usually comes with a lower interest rate than a hard money loan.
Borrow from family or friends: Securing a personal loan from family or friends can provide flexible repayment terms and potentially lower or no interest rates, making it a more cost-effective option.
Use a government-backed loan program: Programs offered by the FHA, VA, or USDA can help in buying homes with lower down payments and reduced interest rates.
Consider peer-to-peer loans: These loans are provided by individual investors through platforms like Funding Circle, offering similar benefits to hard money loans but often with different terms.
Explore specialized loan programs: Explore specialized loans designed for fixer-uppers or investment property refinancing if you already have a hard money loan and want to replace it.
Request a seller financing option: In some cases, sellers may agree to finance the purchase themselves, which can result in lower closing costs and more lenient eligibility requirements.
How to buy before you sell
Sometimes, the perfect home becomes available when you’re not quite ready to sell your current one. Maybe it’s an industrial-chic loft in Downtown Dallas or an architect-designed home in Marfa. If you’re a Texas homeowner looking to buy a new home before selling your current one, HomeLight offers a streamlined solution with its Buy Before You Sell program.
The Buy Before You Sell (BBYS) program allows you to use the equity in your existing home to make a stronger, non-contingent offer on a new property. If your home qualifies, you’ll get your equity unlock amount approved within 24 hours, with no initial cost or commitment. Once approved, you can purchase your new home first, then sell your old home without the stress of moving twice.
Here’s how HomeLight Buy Before You Sell works:
