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There are many online hard money loan calculators available to help estimate these costs.
Alternatives to working with hard money lenders
Let’s say you’re not an investor, but a Florida homeowner looking to leverage your current home’s equity. Here are a few options you might want to consider:
Take out a second mortgage: If you have a significant amount of equity, a home equity loan or home equity line of credit (HELOC) could provide the necessary funds at a lower interest rate compared to a hard money loan.
Cash-out refinance your home: This option allows you to refinance an existing property, withdrawing cash to fund your new investment. It usually comes with lower interest rates than hard money loans.
Borrow from family or friends: A personal loan from family or friends can offer 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 assist in purchasing homes with lower down payments and reduced interest rates.
Consider a peer-to-peer loan: These loans are put forward by individual investors through lending platforms like LendingClub or Prosper, functioning similarly to hard money loans but often with different terms.
Explore specialized loan programs: Consider specialized loans 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 select cases, sellers may agree to finance the purchase themselves, which can result in lower closing costs and less stringent eligibility requirements.
How to buy before you sell
Imagine finding the perfect home just when you least expect it — a cozy bungalow in a sought-after neighborhood or a sleek downtown condo. For Florida homeowners wanting to buy a new home before selling their current one, HomeLight’s Buy Before You Sell (BBYS) is an ideal solution.
This program allows you to unlock the equity in your existing home to make a competitive, non-contingent offer on a new property. If your home qualifies, you can receive approval for your equity unlock amount in 24 hours or less, with no upfront costs or obligations. This enables you to purchase your next home confidently, sell your current one after you move, and avoid the stress of moving twice.
Here’s how HomeLight Buy Before You Sell works:
The program charges a flat fee based on your current home’s sale price, but its benefits tend to outweigh this cost. Savings on moving expenses, temporary housing, and the potential to secure a better deal on your new home are just a few advantages. Plus, HomeLight’s BBYS fees are typically lower than the interest rates on bridge loans, which currently range from 9.5% to 12%.
