Private mortgages and private money have become increasingly popular in recent years due to the many benefits they offer borrowers. One of the main reasons why borrowers use private money is for construction financing. This involves building one or more properties from the ground up, taking on a massive renovation, or adding additional floors or extensions to an existing structure.
While traditional lenders offer construction financing options, borrowers who do not qualify based on their finances or are tackling income properties like residential multi-family or commercial or land development, may find private funds to be a great alternative. Private money lenders offer higher loan-to-values, require less paperwork, and can provide quicker funding, making it an ideal solution for borrowers who need to cover the soft construction costs.
Unlike traditional lenders, private money lenders are not bound by strict lending criteria and regulations, allowing them to be more flexible in their lending practices. Private money lenders are also less reliant on pre-sales, making it easier for borrowers to obtain funding for their construction project. Additionally, private money lenders are often more willing to work with borrowers who have poor credit or a lack of financial history.
When it comes to construction financing, private money lenders are an excellent option for borrowers who need funding quickly and do not qualify for traditional lending options. With their flexibility, higher loan-to-value ratios, and quicker funding, private money lenders can help borrowers achieve their construction goals and get their projects completed on time and on budget.
Summary
Private money is a great alternative to traditional lending options when it comes to construction financing. If you are a borrower who needs funding for a construction project and does not qualify for traditional financing, consider reaching out to a private money lender to explore your options.
