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You can use online hard money loan calculators to estimate these costs.
Alternatives to working with hard money lenders
If you’re a homeowner looking to leverage your current home’s equity, here are a few alternatives to hard money loans to consider:
Take out a second mortgage: A home equity loan or home equity line of credit (HELOC) can provide the funds you need, often at a lower interest rate compared to a hard money loan.
Cash-out refinance your home: This option allows you to refinance your existing property, pulling out cash to finance new investments. It usually comes with lower interest rates 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 rates, making this a more affordable option.
Use a government-backed loan program: Programs from the FHA, VA, or USDA can help you purchase homes with lower down payments and reduced interest rates.
Consider peer-to-peer loans: These loans are provided by individual investors through lending platforms, functioning similarly to hard money loans but often with 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 want to replace it.
Request a seller financing option: In some cases, sellers may agree to finance the purchase themselves, which can lead to lower closing costs and less stringent eligibility requirements.
How to buy before you sell
Sometimes, the perfect listing appears when you least expect it. Whether it’s a charming bungalow in West End or a sleek condo in Midtown, you want to act fast. If you’re an Atlanta homeowner aiming to buy a new home before selling your current one, HomeLight offers a seamless solution.
The Buy Before You Sell (BBYS) program lets you 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 in 24 hours or less, with no upfront costs or commitment. This allows you to purchase your new home confidently and sell your existing one vacant, avoiding the hassle and expense of moving twice.
Here’s how HomeLight Buy Before You Sell works:
While BBYS comes with a flat fee based on your current home’s sold price, the savings in other areas, like moving expenses and temporary housing, and possibly a better purchase price of your new home, could outweigh the cost. Additionally, HomeLight’s BBYS fees are generally lower than bridge loan interest rates, which currently range from 9.5% to 12%.
