Many real estate investors say that hard money loans are expensive. While this may be true, the option remains a great way for people to obtain financing when they have poor credit scores. However you choose to look at it, hard money loans have their place in real estate investment financing.
If you have checked lately you should have realized that hard money lenders have shaken off their once shady and ill-famed reputation. Thanks to strict federal and state regulation, the scenario has changed for the better. The following are the most obvious advantages of borrowing from hard money lenders.
Greater eligibility for financing
Most financial institutions will simply say an emphatic “NO” when they see your unfavorable credit score. This is not the case with hard money lenders. Your financial history is not an impediment to securing real estate financing.
Hard money lenders choose to overlook factors that prohibit you from getting a loan at your bank. Examples of factors that they consider are the viability of the proposed real estate investment and the current worth of the property in discussion.
Speed of processing loan applications
Hard money lenders have recorded super-fast approval speeds. Some can write your loan in just a couple of days. The average bank needs not less than 30 days to process your real estate investment loan. They need to dig up your financial statements to unearth historical happenings.
Banks often use this information to turn down your application for financing. On the contrary, hard money lenders usually finance you quickly to take advantage of the prevailing favorable investment conditions.
Flexibility of lending terms
Forget the annoyingly long underwriting procedure that traditional lenders are bound by law to follow. Hard money lenders look at each loan application individually. This means that different borrowers qualify differently.
Your real estate investment may qualify you for tweaked repayment terms and schedules. In some cases, you will only talk to three or four individuals who are better placed to listening to your needs than a large corporation that has to follow preset rules. For this reason, go to hard money lenders especially if your lucrative investment needs urgent financing.
Quick approval of investment loans
When you are looking for financing, you need it as soon as possible. Since real estate investments fluctuate, you need to invest and recoup returns while current favorable conditions prevail. Nobody understands your needs and objectives better than hard money lenders.
Approval of your hard money loan depends on the worth of your property. While some lenders will need to look at statements of your personal finance, this is usually not a determining factor to your approval for hard money loans.
Convenience of hard money loans
Hard money loans are more sensible for fix-and-flip real estate investors. These are people and organizations that develop a property in a prime location and then sell it at a profit. Such investors never hold on to properties for too long.
There is real convenience in obtaining a short-term loan of about 2-3 years as you refurbish, rebuild or otherwise remodel property. You could make profits in a short period, repay the hard money loan and conveniently move to the next real estate project. Having discovered the numerous advantages, it is time to approach a trusted hard money lender.
Finding a hard money lender
Our platform makes it quick and easy to find a hard money lender for your next real restate investment project. Answer a few quick questions and get matched with lenders across the country that fit your financing needs.