hard money lenders

Borrowing money can help you achieve your goals sooner, but it’s not always easy to secure financing. That’s because there are many standards and requirements that you must meet to secure the funds. However, hard money loans can come to the rescue in such situations.

What Are Hard Money Loans?

Hard money loans are short-term loans that are mostly used by people who cannot get traditional mortgage loans. Private investors lend money to borrowers solely dependent on the property used as collateral. Hard money loans offer the following main benefits:

Short Turnaround Time

In terms of approval, hard money loans are fast and more reliable than traditional mortgage lenders. At best, your application can be approved within a day. This, however, depends on how much equity the borrower has, the down payment made, and the borrower’s previous payment history.

Fewer requirements

Banks will often take you through tedious processes only to turn you down at the end after you have invested all your time trying to meet their requirements. Hard money loans help borrowers save time because they have fewer requirements. A borrower with a sufficient amount of equity in their property and positive payment history has a higher chance of loan approval. Hard money loans are also ideal for real estate investors in escrow because it allows them to seal the deal rather than have the rug pulled from their feet by the bank instead. Also, banks are often reluctant to give out loans to the self-employed because of the uncertainty of payment.

The good news is, hard money lenders consider not only one’s credit score, but they also consider the value of your collateral. In case you are unable to pay back the funds, hard money lenders will recover their money by selling the collateral you provided.

Flexible Terms And Conditions

Hard money loans are flexible compared to bank loans. They are individually funded, meaning the borrower and lender can tailor the loan terms to satisfy both their interests. It is impossible to do the same with traditional lenders as they have strict policies that are difficult to negotiate. For instance, it’s unlikely to loan a realtor money to buy and fix a house with plumbing and electrical issues. The best option is to turn to hard money lenders.

As you can see, hard money loans offer some significant benefits and are worth considering if you’re having difficulty securing traditional funding.