Buying a Home? 3 Reasons to Consider Short-Term Lending
When it comes to financing large purchases, there are only a few options available for you in the world of banking. In addition to working with a lender to procure a fixed or variable-rate loan backed by a bank, you can also borrow money from a friend or family member or turn to a short-term lending business. Here are three times you should consider short-term lending financing.
1. Avoid Traditional Financing
One of the most powerful perks of short-term lending is the fact that lenders use a different set of metrics to choose who to lend to than other types of financial institutions do. For instance, you may be able to quality for a short-term loan with bad credit or a negative note on your credit history, which can be very powerful when looking for a new home. If you have been declined by traditional lenders or the lending process is going slowly, consider working with a short-term lending company to get the ball rolling while you await other deals.
2. You Want to Make a Cash Offer
Sometimes there can be a lot of competition for a new home. When you come across a multiple-offer situation, there's no telling what you would need to offer to nudge out the competition. By working with a short-term lender, you may be able to make a full-cash offer, which shows the sellers you are serious and ready to move forward on the deal.
3. Close Faster
When you have cash in the bank to buy the home of your dreams, you won't have to worry about time-consuming delays on the closing of your new house. Instead, you can move things along quickly, which could help you to get into the home very soon. Oftentimes, all-cash offers on homes can help deals to close within a few weeks, instead of a month or more for traditional real estate transactions. If time is of the essence, a short-term lending program could be just what you need.
If you are considering investing in a new home and you are interested in working with a short-term lending company, think carefully about how much money you have to put down, how much you need, and what kinds of terms would be ideal for your situation. Keep in mind that terms may differ from lender to lender. Consider hiring a real estate attorney to learn more info about your individual contract, so that you can move forward without any issues.