Hardmoney lenders are they worth it?

[Chanel W.]

I found the perfect investment property and I’m not sure if i should use a hard money lender or take out a Mortage. This is my first time using an hardmoney not sure if i should proceed or explore other options. Any suggestions?

[Ryan Blake]

@Chanel W. Hard money is best for people in specific situations.

1)Bad credit

2)No source of W-2 income

3)Little to no money to put a 20%-25% down payment on an investment property

If any of these are true, then HML may be the best way to go. Rates are different depending on your location and I am not sure what you are seeing in Delaware but here in Texas we see 12-14% APR and 2 - 4 points due at closing. Fees will run anywhere from $600 - $1,000.

If you add the interest and fees just as part of your cost and it still looks like a good deal, then do it. It is better to do a deal than skip one just because the dollar amount for financing is high.

Good luck in your search and know that if the numbers make sense, you have made the right choice.