hard money lender

Hard money loans allow you to bypass traditional lenders and get money using your physical property as security. These are the most common types of loans for people with a bad credit score, as banks will consider you a high-risk borrower if you don’t have a good credit score. There are several types of hard money loans, however, all of them have flexible terms, quick delivery of funds, and much higher approval rates. Hard money loans usually require anywhere from 30 to 40% down. Here are some of the types of loans offered by a hard money lender.

Mortgage Refinancing

This is one of the most common types of loans offered by a hard money lender. Mortgage refinancing is a loan that pays off loans secured to your property. This clears the previous loans but results in a new loan. The new loan will usually have a bigger principal balance and a better interest rate. If you are a homeowner and you need refinancing, you can roll the cost of the new hard money loan into the principal balance. You can also pay off the costs of the old mortgage straight from the borrower’s pocket.

Cash-out Refinances

You can get a cash-out refinancing loan when you take a new loan that is larger than the amount of an old loan that you wish to pay off. The excess money that you get from a cash-out refinancing loan is known as cash to the borrower. In general, this money is the proceeds of the refinancing. As a homeowner, you can use this money for home improvement projects that will increase the value of your home. However, this type of loan is not too common among those who want to pay off loans with high-interest rates.

Equity Loans and Bridge Loans

An equity loan is a type of loan offered by a hard money lender that funds quickly. However, this loan will be subordinate to the original mortgage. On the other end, a bridge loan is used by a homeowner who wants to buy another property before they sell an existing one. These types of hard money loans are mostly used in seller’s markets rather than in buyer’s markets.

These are some of the types of hard money loans that you can benefit from. If you are interested in learning more, reach out to us at ARC Private Lending today.