Owner – Occupied Hard Money Loans

Owner-occupied loans, also known as consumer-purpose loans, are offered to finance properties that borrowers intend to occupy as their primary residence. There are quite a few challenges being faced by the private lending sector including perceived risks, resource constraints, and low expertise. That’s why owner-occupied hard money loans come into the picture. A common question asked by borrowers is about acquiring owner-occupied hard money loans for their businesses.

The answer to that is “Yes“ because hard money lenders will lend cash for owner-occupied homes if the funds aren’t going to be used for personal or family use and will only be used for business purposes. A lot of people don’t understand owner-occupied hard money loans; that’s mainly because there are so many misconceptions about them. We’re going to answer all the major queries about owner-occupied hard money loans, so you get the complete picture.

What Makes Owner-Occupied Hard Money Loans Rare?

Owner-occupied loans, also known as consumer-purpose loans, are offered to finance properties that borrowers intend to occupy as their primary residence. There are quite a few challenges being faced by the private lending sector including perceived risks, resource constraints, and low expertise. That’s why owner-occupied hard money loans come into the picture. A common question asked by borrowers is about acquiring owner-occupied hard money loans for their businesses.

The answer to that is “Yes“ because hard money lenders will lend cash for owner-occupied homes if the funds aren’t going to be used for personal or family use and will only be used for business purposes. A lot of people don’t understand owner-occupied hard money loans; that’s mainly because there are so many misconceptions about them. We’re going to answer all the major queries about owner-occupied hard money loans, so you get the complete picture.

What Makes Owner-Occupied Hard Money Loans Rare?

A lot of hard money lenders don’t offer owner-occupied hard money loans, which is mainly down to the stringent lending requirements for conducting business. The main reasons owner-occupied lenders don’t offer loans for your primary residence are because of the following:

• Mandatory recession periods increase the time need for funding the loan
• Investment loans come with greater risk
• The government exerts more stringent regulations
• Lenders require additional licensing
• They require additional documentation

Owner-occupied hard money loans are legal but there are limitations placed on the amount that is charged and what you can do about it. Here’s everything you need for owner-occupied hard money loans:

• Understand disclosure requirements so you understand the terms of the loan before signing
• You can request to be exempt from prepayment penalties for high-cost loans
• Property taxes and hazard insurance applies to high-cost loans in the first year
• You need to prove you can repay the loan

That’s just a glimpse of what you can expect when you try to qualify for an owner-occupied hard money loan.

Advantages of Owner-Occupied Hard Money Loans!

There are several advantages you end up gaining as a borrower through owner-occupied hard money loans. Borrowers with large down payments can still qualify for them but the receiver needs to demonstrate that they can meet monthly installments. Owner-occupied properties can be anything from a fourplex, triplex, duplex, single-family house, or condo. The advantages you gain with owner-occupied hard money loans are as follows:

• Recent short sales aren’t a problem
• Borrowers with foreclosure can qualify
• No limitations for recent bankruptcy
• Quick disbursement of funds
• Zero prepayment penalties
• Same-day pre-approval
• No set standards for credit score
• No upfront lender fees

If you can’t qualify for a conventional mortgage, a properly under written owner-occupied hard money loan is an excellent alternative. You can use it as bridge financing and there may be times when you need to buy a property before you have a long-term financing solution. You can always use owner-occupied hard money loans if you’re experiencing one of the following:

• You need a bridge loan so you don’t need to avoid taxes or liquidate your assets
• Foreclosure or sale
• Divorce and probate issues
• You’re looking to buy a new home and want to sell an old home
• Reverse mortgage fallout
• You’re downsizing but don’t want to make a double move

A traditional lending institution won’t grant you a loan in any of the above-mentioned situations but a hard money lender is going to evaluation your financial situation. If they feel you qualify for a low-cost loan, they’ll offer you an owner-occupied hard money loan.

Interested to learn more about owner-occupied hard money loans? Get in touch with PB Financial Group today.