Hard Money LoanWhat are the advantages?
As the economy has struggled over the past few years, individuals are finding that the credit that was once abundant and available has all but dried up. Even the banks that have received stimulus funds in an attempt to encourage lending are hoarding their cash and refusing loans to all but a handful of the most credit-worthy borrowers. Traditional loans have almost become a thing of the past.
Not all hope is lost, though. For those who need quick funding and have a bit of real estate collateral, a hard money loan can open the doors to cash flow.
While banks may have dried up credit lines, private lenders, mortgage companies, and small business associations are willing to provide loans to people anxious to repair and renovate houses, start new businesses, and invest in personal and public economic recovery. By basing their loans on real estate collateral, these hard money lenders can escape some of the risks that keep banks from making traditional loans in troubling economic times.
Plus, the benefits of hard money loans can make them an attractive alternative for borrowers. These types of loans are often unrestricted by most state or federal laws, so lenders are able to be more flexible and tailor the conditions of the loan to the borrower's unique situation.
Because the loans are secured with real estate collateral, the borrowers credit score is not a barrier to getting accepted for the loan, so they're great for anyone whose credit is less than perfect.
For anyone who has recently acquired a foreclosure property and is eager to make some repairs, these asset-based loans are usually valued at 65-70% of the property's ARV or after repaired value. That means, the loan is based on the amount the house is worth after it's brought to its full potential; traditional loans don't offer that.
Also, you can get the loan in much less time than the 30 days that traditional loans require. That means they're ideal for projects that need quick funding.
For anyone who has grown frustrated with the credit freeze of traditional banks and lenders, a hard money loan provides an attractive alternative. With the right lender, borrowers can find great rates and close quickly and easily. There are a number of great companies that help borrowers find reputable and experienced lenders that will offer a loan light on hassle and quick on returns.
If you're looking for a hard money loan, you've come to the right place. Simply fill out our Hard Money Guide Contact Form and one of our experts will contact you as soon as possible.