Hard Money Lenders Utah | Anchor Loans Lending Millions to Utah’s House Flippers
Nationwide fix and flip lender Anchor Loans is now one of the leading hard money lenders Utah house flippers can turn to for new construction loans and fix and flip financing. Providing billions in capital to U.S. real estate investors since 1998, and emerging in 2015 as the nation’s number one provider of fix and flip financing nationwide, Anchor Loans now includes Utah in the 48 states and D.C. where their flexible, quick bridge financing is available to real estate investors.
Why Utah House Flippers Choose Hard Money Lenders for Real Estate Investing
Hard Money Loans Fund Fast
In the fast-paced world of house flipping, the goal is to find a flip property with great profit potential at a great price—then quickly purchase, renovate and resell it for profit. Turnaround time is always a critical aspect of house flipping, and when it comes to financing a flip project, a hard money loan is faster and more flexible than the 30 to 60 days a conventional bank loan takes to close.
With a hard money loan, an approved borrower can receive funds in as little as 3 business days—or possibly even faster for repeat borrowers financing rush deals. Some hard money lenders even offer a fast "close as cash" program where investors can use a bridge loan to buy a fix and flip property with a loan that closes like a cash purchase—this means the lender funds the property purchase and assigns Title to the borrower, then records a Grant Deed after escrow closes. This type of loan product can be used by experienced real estate investors who are bidding for fix and flip properties at foreclosure auctions and other types of cash-only sales where they need to be able to compete with cash buyers.
Hard Money Lenders Make Qualifying Easier
A conventional bank takes weeks longer to fund fix and flip loans because their approval and underwriting process is so lengthy and there are strict qualifying rules that have to be followed. The conventional bank's loan approval is mostly credit-based, and they will be microscopic in their approach to your creditworthiness as they thoroughly examine your financial history. Any red flags that come up along the way will trigger a request for more documentation, which further prolongs the conventional bank's approval process.
When applying for a hard money fix and flip loan, real property serves as collateral on the loan. Hard money lenders are less concerned with your credit (although a good FICO score has its perks), and they will be much more interested in your experience in real estate and your proven success flipping houses. A hard money lender will set a minimum preferred credit score, but with a fix and flip loan, if your equity position in the deal is healthy, or if you have completed successful flips in the past, hard money lenders can, and often do, bend their minimum credit score rule.
With Hard Money Lenders Utah House Flippers can Borrow for Shorter Terms
A conventional bank will likely offer to amortize your home loan over 15 or 30 years, however, a hard money lender typically provides house flippers with a shorter-term bridge loan for buying and renovating investment properties. With a fix-and-flip bridge loan, the borrower will be responsible for monthly interest-only payments for 6 months to two years until the full amount of the loan is due.
Another advantage of working with hard money lenders is many of these lenders will not charge borrowers an early payoff penalty. As soon as your property sells, you can pay off the principle and move on to your next house flip. Also, if you run into a snag in your house flipping business plan and you need more time to pay off the loan, your hard money lender may offer one or more 3 to 6-month extensions. Before you decide on a lender, be sure to research whether they offer these options.
Hard Money Lenders Expect Poor Property Condition
In most cases, a conventional bank will have strict rules regarding the condition of the property you are financing. The as-is value of the property will heavily affect the loan amount a conventional bank can approve.
Hard money lenders that specialize in fix and flip financing expect the as-is condition of the property to be poor—so the lender will focus on the after-repair value (ARV) of the property when approving your loan amount.
Hard Money Loans Typically Have Higher Rates
If you have compared the loan costs between conventional bank loans and hard money loans, you have noticed a difference in loan costs. With a conventional bank, the loan origination fee will usually be one or two points (1% to 2% of the loan principle) and loan interest rates are typically constrained more by current market rates.
Hard money lenders typically charge higher interest rates than a conventional bank, and the origination fee can range from two to four points or more. Be sure to ask all the right questions regarding loan costs, and ask if there are any additional fees the lender may charge.
Be aware that both the conventional bank and the hard money lender will ask you to contribute a down payment, which will range from 10% to 50% of the loan amount, depending on a number of factors the lender will use to determine your project’s loan to value qualifications.
Hard Money Lenders Utah | How to Choose the Best Lender for Your Real Estate Investing
Before partnering with a hard money lender, Utah fix and flip investors should perform their due diligence and thoroughly vet prospective lenders. Read our recent blog article "How to Decide Between Hard Money Lenders " for detailed advice on how to underwrite your lender. Here are a few of the important questions the article explores:
- How many days will it take from filling out my application to receiving funds?
- Will I work with one dedicated account executive and one loan processing team?
- What type of advanced fintech supports the lender's processing and how does it benefit borrowers?
- Does this lender offer a bridge loan "close as cash" product to that helps investors compete with cash buyers?
The Speed and Flexibility of Anchor Loans' Fix and Flip Financing and New Construction Loans
There is an excellent reason that over 85% of Anchor's borrowers are repeat customers, and that reason is trust. Anchor Loans was the first hard money lender to fund more than $1 billion in fix and flip loans in a single year. Anchor remains an industry leader, providing over $1 billion in fix-and-flip financing every year since 2016—with life-to-date fundings surpassing $8.5 billion.
As we all navigate through challenging economic times, our entire staff remains committed to providing our borrowers with exceptional customer experience. Applying for Anchor fix and flip financing or one of our new construction loans is easy with our step-by-step online application. Please do not hesitate to reach out to our team with any questions you have.
