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Military Loans: Fast Approval
For those in the Army, Navy and, likewise other civil services, Military Loans provide the ideal credit options to plan and do things that you always wanted to but just couldnt. Basically, a US military loan is one that is given out exclusively to current and former personnel from the US military, including National Guard. These loans offer interest rates below those offered to civilians and well below credit card and other loan rates. The loans are not secured by any sort of collateral, and the credit checks are minimal if done at all in many cases. Overall, the loans are a great way for those in the military to pay off bills, or help meet emergency situations. It is one of the many benefits of your service to the country.
So the question that arises is where do you get an armed forces loan? The short answer is pretty much anywhere. However, the best way to find where you can get a military loan is to look online. You can also go to the financial advisor for your USAF, USMC, or Army base and enquire about the relevant details. They will be able to get you in touch with the right institution for securing a military loan to help you out.
Additionally, with a military loan, you can help out family. That is because, once you secure the loan, you can have the money sent to whomever you need to receive it. The loans have quick applications and are fast to pay you, so you will not have to wait when faced with a financial crisis. Also, if you are actively involved where you cannot apply for a loan, power of attorney people can actually apply on your behalf, which is a nice benefit.
On the flip side, however, one might actually be taken for a ride by numerous scrupulous companies who offer these military loans at only a slightly lower interest rate. The terms and conditions associated with the loan are framed in such a way that in order to repay the loan, the borrower has to apply for another loan. So the hapless borrower often falls in a debt trap. It is, therefore, advised that proper research must be done prior to filing a Military loan application.
What are Hard Money Loans?
For the purpose of financing your investment properties there are two options- Hard Money & Soft Money.
Soft Money- is simply money that is borrowed from banks and other lending institutions. This is the normal loan process where the loan is underwritten by an underwriter. There are rules and guidelines that are made by the lenders or by the groups that buy the loans from the lenders. This would include all loan types and verities.
Hard Money- is money from investors to fund your investment property. Hard Money is normally sort term. Hard Money is normally used when the property needs some repairs and rehab. With Hard Money you can finance the expense for repairs as a part of your loan. If you are able to locate a home with good equity you will be able to do the entire purchase and rehab with no money out of your pocket.
The Rules- since the money is coming from private investors they can make their own rules, unlike soft money above where the rules can be more restrictive. For this reason you can obtain money and eventually additional money based upon your track record and performance with a particular Hard Money Lender.
After Repair Value (ARV) – This is what the property would be worth after your rehab is competed and this value is normally determined by appraisers that work with your hard money lender. Normally Hard Money lenders will loan 65 of the ARV. This is how it works
if you buy a home for $100,000 you can borrow $65,000, 65 of that amount or $130,000, now you have money to buy the house for $100,000 and pay for your rehab.
Escrows- This is money that is held by a 3rd party, normally a Title Company, for a specific purpose. In the case of Hard Money Lending they would escrow your repair money and in some instances they would escrow your first couple of payments. This is done to ensure that the work on the property is actually completed. When you first apply for your Hard Money Loan for a specific property you would prepare a work sheet of what needs to be done and the cost of that work. This would be used to set up your escrow account.
Draws- The way the money for repairs is disbursed is by using draws. The Hard Money Lender would physically inspect the property to ensure the work was actually done and disburse the money accordingly. The money is not released all at once, rather in gradual portions as the work is completed. Each portion is a draw.
When & Why- There is a time a place to use Hard Money Loans. Normally for Soft Money to be used the property needs to have a roof, windows, doors, floor coverings. If the property does need some work this is called deferred maintenance. This would be noted by the appraiser when the appraisal is done. Traditionally if this number is over $2,000 you would not be able to receive a Soft Money Loan. The other reason investors use Hard Money Loans is so they do not need to use any of their money or to personally fund their project. As you can see a good portion of the properties an investor buys would be financed with a Hard Money Loan. This is due to the fact that most foreclosed properties are not well kept. However, there are always exceptions to this.