Owner – Occupied Hard Money Loans

Get the Financing You Need with 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?

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.