Guide of Bridge Loan in Pennsylvania- Learn everything about Bridge Loan in Pennsylvania
Comprehensive Guide of Bridge Loan in Pennsylvania- Learn about Bridge Loan in Pennsylvania
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How Does A Bridge Loan Work in Pennsylvania?
A Bridge loan is a way for you to borrow money for real estate without using traditional mortgage lenders. Instead, the funds come from investors who lend money based primarily on the property you’re using as collateral.
Traditional mortgage loans require proof that you can comfortably repay the debt. Lenders often review your credit scores and any income available to evaluate your creditworthiness. If you have plenty of income, savings, or can get another collateralized loan you might not need to worry.
Bridge Loan lending is currently a very efficient way to close quickly and provide high leveraged capital at reasonable rates.
Bridge loans are generally short-term loans, lasting from 1,2 or three years. You use them as a quick way to get money for a purchase. However, you wouldn’t want to keep one of these loans for an extended period because interest rates for hard money are typically relatively high.
WHO CAN QUALIFY FOR A BRIDGE LOAN IN PENNSYLVANIA?
Hard money loans offer an alternative to conventional loans for a range of buyers. They’re especially helpful for “fix-and-flippers,” or real estate investors who buy distressed properties, then repair and rehab for sale or to rent.
Flippers sometimes need to make real estate investment decisions on a dime. We understand the need for speed; that’s why we offer such a fast approval process. Often, our hard money loans are closed and funded in just 7 business days!
But not all real estate investors want to fix and flip. Many wish to purchase distressed properties to repair and rent to tenants. Rental loans help landlords maximize their investment opportunities through a range of rehab, refinance, and purchase-only options.
Unlike conventional or bank loans — which focus on individual credit-worthiness — hard money loan underwriting is based largely on the future value of the asset the investor is purchasing. Our loans are available to real estate investors that meet certain credit and liquidity requirements, rather than first-time homebuyers or buyers who plan to live in the property they wish to purchase.
While Philadelphia may have a larger economy, Pittsburgh has emerged as a new real estate investing hotspot. The homes are relatively inexpensive and older when compared to other modern cities, and the market appreciation is up 23% over the last 5 years (dated 2019). Pittsburgh was rated the #1 “best city for jobs” by Glassdoor in 2018, meaning the economy is stable and the jobs themselves are well-paying and attracting new residents. You also have numerous schools including the University of Pittsburgh and Carnegie Mellon creating a demand for rental units.
STRATEGIES FOR MAKING THE MOST OF BRIDGE LOANS
Speaking of leverage, how can an investor make the most of their bridge loan pennsylvania? When an investor wants to purchase a fix and flip, they may choose to use their own money to do so. In most cases, this means draining an account, then waiting to recoup those costs until the repairs are complete and the property is sold or rented.
In contrast, taking out a hard money loan means less out-of-pocket cost. The investor can use the bridge funding to purchase and repair the property without draining their account. That leaves their own funds available for other investment projects.
This way, investors use just a small percentage of their cash on hand and leverage it to make more.
