The tales of mortgage woes have been headline news for months, with homeowners throughout the nation struggling under the burden of reset ARMs, adjustable rate mortgages, in hopes of avoiding loan payment defaults and foreclosure.
Foreclosure prevention through the standard means of home equity lines or taking out a 2nd mortgage may not be an option for those with poor credit, as the turmoil in the market has resulted in a recent tightening of lending practices. However, that does not mean that struggling homeowners do not still have options for loans. Hard money loans, or private lending, can help a homeowner avoid foreclose.
Hard money refinancing can be the answer for a homeowner in distress, one that has suffered not only an increase in monthly payments as his ARM went up, but also damage to credit rating as he struggled to meet his monthly financial obligations.
Traditional lenders, especially in the current climate, may be a bit leery of making a loan to a borrower that is obviously struggling to keep up with his current obligations. Private lending, however, is a different matter altogether.
Hard money loans through private lending do cost more than those through traditional lenders, something that is quite understandable, as hard money loans are a bigger risk. For many who are seeking foreclosure prevention, the extra money that they’ll pay when all is said and done is well worth keeping the property they’ve worked so hard for. While private lending practices can vary from lender to lender, in general, in making the loan decision, the potential lender looks at the likelihood of being able to sell the collateral property and make a profit if the borrower defaults.
The home equity credit line for bad credit can enable you to get access to quick cash
A short sale can have an impact on the Sellers credit, but nothing as bad as a foreclosure.
Finding hard money loans is not as difficult as it may seem to those who are not well experienced in real estate and finance. Mortgage brokers often are able to provide assistance, as can companies or agencies that provide other sorts of lending services. Spending a bit of time and effort in online research is another way to connect with private lenders that make hard money loans. Many reputable and legitimate lenders have cultivated their online presence, making it easier for borrowers to take advantage of what they have to offer.
Foreclosure prevention is possible, even with poor credit. There are options beyond the traditional 2nd mortgage or home equity lines offered by conventional lenders. Hard money loans can be the right solution, as private lending standards often differ from the usual routes, especially now that lending practices are starting to tighten up in response to the mortgage and lending crisis. For those on the brink of foreclosure, actively seeking financing in hopes of avoiding loan payment defaults, hard money loans are an option well worth investigating. This article was written by Sharon Secor.