Financing Real Estate Deals
Bank Financing: This is the first and most commonly referred to technique for novice and seasoned investors. Bank Financing often offers the cheapest and longest term financing available. Mortgage brokers are mostly used for this king of financing. The problem is that motivated sellers usually need cash right away, and this kind of financing can take 30 days or more to fund.
Refinancing: This is simply obtaining a new loan to pay off a loan that already exists on a property. Title does not change hands. Only the security deed changes. Reasons for the refinance are better terms, or there is large enough equity to do a cash out.
Hard Money Loan: A hard money lender is a quicker faster way to get cash. The loan is based on the value of the property itself, and typically not on the credit of the borrower. Many hard money lenders were at one time or are real estate investors. Closing can happen in two weeks or less, but the fees and interest rates are much higher than a regular bank loan. Hard money loans are typically used as a short term method of finance, and are sometimes referred to as bridge loans.