When you are looking for ways to finance your property, you may hear of many options available, including a hard money loan. However, you may be wondering what is a hard money loan? It is essential to answer that question before you consider it as an option. Continue reading to find out all the details you need to know about a hard money loan.

What Is a Hard Money Loan?

The simplest explanation to the question of what is a hard money loan is that it’s a short-term loan that is secured by your property. In general, hard money lenders provide about 65 to 75 percent of the value of the property. Hard money loans are funded by investors or a mortgage broker. They typically use their own funds to supply the loan. A bank is not involved in hard money loans.

Hard Money Loan Benefits

It is often easier to get hard money loans than a traditional loan, especially if you have a real estate investment. This means you are able to snatch up deals right away that are too good to pass up, but you need the money immediately. Banks do not often lend money immediately. It is critical to keep in mind that the intention is you are borrowing money for only a short time.

Who Might Be Interested in Hard Money Loans?

Hard money loans typically appeal to those who want to purchase a house quickly and are not able to get the funds elsewhere. Those with credit issues, bankruptcies, foreclosures, and other problems can also benefit from a hard money loan because a bank may not be willing to give them one.

When you are considering loans for a property, you want to answer the question of what is a hard money loan before making any decisions. Hard money loans are ideal for specific situations. For example, if you do not think you are going to be able to sell the property or repay the loan in the short amount of time given to you, then a hard money loan may not be the right option for you. If you are interested in learning more about the benefits of hard money loans, contact us today.