Hard Money Lenders Orange County: Fast Financing Solutions
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Kelsey Morrison Former HomeLight EditorClose
Kelsey Morrison Former HomeLight EditorKelsey Morrison worked as an editor for HomeLight's Resource Centers. She has seven years of editorial experience in the real estate and lifestyle spaces. She previously worked as a commerce editor for World of Good Brands (eHow.com and Cuteness.com) and as an associate editor for Livabl.com. Kelsey holds a bachelor’s degree in Journalism from Concordia University in Montreal, Quebec, and lives in a small mountain town in Southern California.
Are you looking to kickstart your next real estate project in Orange County with a hard money loan? Whether you’re eyeing a mid-century fixer-upper in Anaheim or a potential rental property in Newport Beach, hard money lenders in Orange County can provide the quick funding and flexibility you need. Hard money loans offer a flexible financing option outside of traditional banks, perfect for those who need quick cash, have limited savings, or face credit issues.
Start Making Offers Without Waiting to Sell Your Home
Through our Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency.
Even if you’re not a real estate investor but need to bridge the gap between buying and selling your home, we’ve got you covered with alternatives to tap into your home’s equity. This article will break down the basics of hard money lending in Orange County, helping you see if this approach fits your real estate goals or home-buying needs.
What is a hard money lender?
Hard money lenders are institutions that offer hard money loans, which are named after the “hard” assets used as collateral, typically real estate. Instead of relying heavily on a borrower’s credit or income, these loans are approved based on the property’s value. They often work with clients like house flippers and rental property buyers who need quick, flexible funding.
Hard money lenders determine loan amounts based on the after-repair value (ARV) or the estimated value of the property after renovations. Typically, they lend a percentage of the ARV to ensure their investment is secure.
Interest rates for these loans range from 8% to 15% or more, with repayment periods usually between six and 24 months. Borrowers also incur costs like origination fees, closing costs, and points. If a borrower fails to repay, the lender can seize the property to recoup their investment.
How does a hard money loan work?
If you’re looking for a quick and flexible financing option for your real estate ventures in Orange County, a hard money loan might be the solution. Here’s a breakdown of how these loans generally work:
- Short-term loan: These loans typically have a repayment period of six to 24 months, much shorter than the 15- or 30-year conventional mortgage terms.
- Faster funding: Hard money loans can be approved within days, offering a much quicker turnaround compared to the 40 to 50 days needed for traditional mortgage approvals.
- Less focus on creditworthiness: Approval is less dependent on your credit score and income history and more on the value of the property.
- Greater scrutiny on the collateral: These loans are based on the loan-to-value ratio of the property being used as collateral.
- Non-traditional lenders: Hard money loans are typically provided by private investors or lending companies, not traditional banks.
- Traditional loan denial: These loans are often used by individuals with poor credit who have been denied a mortgage but possess significant home equity.
- Higher interest rates: Due to the higher risk involved, hard money loans carry higher interest rates compared to conventional mortgages.
- Larger down payments: Borrowers might need to provide larger down payments, sometimes up to 20% to 30% of the property’s value.
- More flexibility: With fewer regulations, hard money lenders can set flexible criteria, including credit scores and debt-to-income ratios, and can help homeowners avoid foreclosure.
- Interest-only payments: Unlike traditional mortgages, some hard money loans initially allow for interest-only or deferred payments.
What are hard money loans used for?
Hard money loans serve various needs within the Orange County real estate market. They’re a go-to for investors and homeowners who need quick cash or don’t meet traditional lending criteria. Here’s how these loans are typically used:
Flipping a house: In Orange County, investors focused on flipping homes benefit from the fast funding that hard money loans provide. This type of financing enables them to buy, renovate, and sell properties quickly, taking advantage of market opportunities.
Buying an investment rental property: Investors looking to buy rental properties often use hard money loans for quick access to funds. These loans enable fast purchases and necessary renovations, allowing landlords to start earning rental income sooner.
Purchasing commercial real estate: Hard money loans are ideal for commercial real estate deals due to their flexibility and speed. They help investors act quickly on valuable properties, often beating out competitors who rely on slower, traditional financing.
Looking for alternatives to traditional loans: Those with significant home equity but poor credit sometimes use hard money loans. These loans focus on the value of the property rather than the borrower’s credit score, making them accessible to more people.
Facing foreclosure: Hard money loans can be a lifeline for homeowners at risk of foreclosure. They provide the funds needed to refinance or buy time to sell the property, helping to avoid the negative impact of foreclosure on credit scores.
How much do hard money loans cost?
Hard money loans typically cost more than traditional loans due to their higher risk and convenience. Here are some of the common costs:
- Interest rates: These can range from 8% to 15%, based on the lender’s risk assessment.
- Origination fees: Lenders might charge 1% to 5% of the loan amount.
- Closing costs: Additional fees like legal and appraisal fees are due at closing.
- Points: Lenders may charge points, a percentage of the loan amount, upfront.
You can use online hard money loan calculators to estimate your total costs.
Alternatives to working with hard money lenders
If you’re an Orange County homeowner looking to tap into your home’s equity, here are several alternatives to consider:
Take out a second mortgage: With substantial equity in your home, a home equity loan or a home equity line of credit (HELOC) can provide funds at lower interest rates compared to hard money loans.
Cash-out refinance your home: This option lets you refinance your existing mortgage, pulling out cash for new investments, often at a lower interest rate than hard money loans.
Borrow from family or friends: Personal loans from family or friends can offer flexible repayment terms and potentially lower or no interest, making it a more affordable option.
Use a government-backed loan program: Programs like those from the FHA, VA, or USDA assist in purchasing homes with lower down payments and reduced interest rates.
Consider peer-to-peer loans: Provided by individual investors through platforms like Funding Circle, these loans function similarly to hard money loans but often have different terms.
Explore specialized loan programs: Look into specialized loans for fixer-uppers or investment property refinancing if you already have a hard money loan and are looking to replace it.
Request a seller financing option: Sometimes, sellers may agree to finance the purchase themselves, resulting in lower closing costs and less stringent eligibility requirements.
How to buy before you sell
Sometimes, the perfect home pops up on the market when you least expect it. Perhaps it’s a turnkey townhouse in Tustin or a rare mid-century home in Costa Mesa. If you’re an Orange County homeowner looking to buy a new home before selling your current one, HomeLight has a solution that simplifies the process.
The Buy Before You Sell (BBYS) program allows you to use the equity in your current home to make a strong, non-contingent offer on a new property. If your home qualifies, you can get your equity unlock amount approved within 24 hours, with no cost or commitment required. This program lets you purchase your new home first and then sell your existing home vacant, avoiding the hassle of moving twice.
Here’s how HomeLight Buy Before You Sell works:
Although there’s a flat fee based on your current home’s sale price, the potential savings could be significant. You might save on moving expenses, temporary housing, and even the purchase price of your new home. Plus, HomeLight’s BBYS fees are typically much lower than the interest rates on bridge loans, which currently range from 9.5% to 12%.
3 top hard money lenders in Orange County
Finding the right hard money lender in Orange County can make or break your deal, especially with how fast the market moves. To help you out, here are three lenders investors in the area trust for quick, flexible financing. Each one has a solid track record, competitive terms, and experience with the unique pace of Orange County real estate:
Hard Money Lenders California
Hard Money Lenders California is a trusted hard money lender serving borrowers throughout the state, offering financing solutions for deals ranging from $100,000 to $100 million. The company streamlines the lending process with a simple online application that clients can complete in under 10 minutes, making it easy to secure funding for real estate projects of any size.
Within 24 hours of receiving an application, the team provides a clear, transparent offer outlining all terms, ensuring borrowers know exactly what to expect from the start.
Lending clientele: Residential, commercial, and development investors, and homeowners
Loan criteria: Up to 85% LTV; in certain scenarios, up to 90% LTV
Earning praises from past clients, Hard Money Lenders California holds a 5-star rating on Google. Customers commend the team’s great service, honest terms, and attention to detail.
Some highlight how the team takes time to understand each client’s goals, offering clear, actionable guidance that simplifies even the most complex financial concepts. Others also recognize the consistent communication, quick responses, and proactive support throughout the process.
Website: hardmoneylenderscalifornia.com
Phone number: 858-203-2854
Alliance Portfolio
Alliance Portfolio, located in Aliso Viejo, provides reliable lending solutions to property owners and investors in Orange County, Los Angeles, San Diego, and the Bay Area. Founded in 1996, the full-service, boutique, private money lender offers several different loan types and accommodates single-family homes, non-owner-occupied residential properties, multi-family units, commercial properties, light industrial properties, mixed-use properties, and vacation rentals. Applicants can get approved within 24 hours, and loans can close in as little as five to 10 days.
Lending clientele: Residential and commercial real estate investors, developers, and homeowners
Loan criteria: Up to 65% LTV
Alliance Portfolio earned a high A+ grade from the Better Business Bureau (BBB). Its Google Business Profile reflects an average score of 4.8 stars, with customers expressing appreciation for their efficiency, professionalism, and responsiveness.
Reviewers highlight fair rates and borrower-friendly terms, along with a team that is easy to work with throughout the process. Many note that closings can happen in just a few weeks or less, making the experience both efficient and reliable.
Website: allianceportfolio.com
Phone number: 949-349-1322
Save Financial
Save Financial offers a comprehensive range of lending solutions designed to meet the diverse needs of real estate investors and property owners. Their loan programs include hard money loans secured by real estate.
With flexible terms ranging from 12 to 24 months and prepayment options of three to six months, Save Financial’s offerings are structured to align with the timeline and objectives of each project. The firm combines adaptability with industry expertise to provide investors with reliable, tailored financing solutions.
Lending clientele: Residential and commercial real estate investors, and homeowners
Loan criteria: Up to 75% LTV
Save Financial has a 4.9-star rating on Google based on over 100 reviews. Clients highlight their excellent communication, smooth loan process, and competitive rates. Some note positive experiences with multiple loan types and appreciate the team’s professionalism and reliability. Others refer clients confidently, highlighting the consistent satisfaction and trust they’ve experienced with Save Financial.
Website: iloanca.com
Phone number: 888- 703-1840
Hire an investor-friendly real estate agent who can help you get access to off-market properties at a discount and assess potential rental income based on market trends. HomeLight can connect you with investment property specialists at no cost.
Investing in real estate?
Should I partner with a hard money lender in Orange County?
Deciding whether a hard money loan is right for you in Orange County depends on your specific needs and real estate investment goals. This type of financing is perfect for projects that need a quick turnaround or when traditional financing options are not viable.
If you’re prepared to handle the higher costs and shorter repayment periods for the sake of fast and flexible funding, reaching out to a hard money lender in Orange County could be a smart move for your next investment.
For homeowners who want to leverage their home’s equity, HomeLight’s Buy Before You Sell program might be a more suitable option. Instead of facing high interest rates, you’ll pay a modest flat fee and benefit from a stronger offer and a smoother move.
When making such a significant financial decision, consider your long-term strategy and consult with a financial advisor to ensure it aligns with your overall goals. If you’re looking for investor-friendly real estate agents in Orange County who can connect you with trusted hard money lenders, HomeLight can introduce you to top real estate agents in your area.
Editor’s note: This post is for educational purposes only and should not be considered financial advice. HomeLight encourages you to consult your own advisor.
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