Fix and Flip or Conventional Mortgage?
When you buy a residential property so you can update it and resell, you may have a variety of loans you can choose. The right one can make all the difference in how you complete the project. Many people apply for a conventional mortgage or an FHA-backed 203k loan to provide the money they need to buy the property and fix it. Since these mortgages are generally targeted at owner-occupied properties, they emphasize credit rating and ability to pay the loan over time. This makes the underwriting process take longer, as long as several months in some cases.
By comparison, a fix and flip loan comes from a private lender and primarily uses the viability of the project to determine eligibility. This tends to cut down on the time needed to get to loan approval, as quickly as 48 hours in some cases. The short-term loan is designed to get you the money you need at the exact time you need it. Investors get a lump sum to buy the property, then periodic draws to pay for work according to the project timeline. Terms for these loans are usually significantly different from conventional mortgages, with higher interest rates and larger down payments.
Why Do Investors Choose Asset Based Lending for Fix and Flip Loans in NJ?
Getting all the money you need as quickly as you need it is essential for your business. We know we are not the only hard money lender in NJ, so we work tirelessly to provide only the best service and advice to our borrowers. When you call us, our experienced team is ready to talk to you about your project and determine your best course of action.
Although all of our loans are custom to the project, you can always count on ABL for:
- Preapproval within 24 hours of initial prequalification
- Closing within 10 days on average
- Flexible loans sizes from $75,000 to $3-4 million
- No prepayment penalties
With our competitive rates and knowledge of the real estate market in New Jersey, we can help you tailor a loan that suits your project.
When you are a busy real estate investor, you need a lender that works as hard as you do. If you want to discover why Asset Based Lending has the fix and flip loans that NJ real estate investors prefer or you are ready to prequalify, contact us today.