Don’t qualify for a conventional loan? Need a quick, short-term financial solution? Hard money loans may be the answer to your financial needs. Many people utilize hard money loans as a way to quickly borrow money for the short term and are particularly popular with borrowers like real estate investors. However, any borrower can take out a hard money loan as long as they have assets in their portfolio.
Interested in getting a hard money loan? Here are all the things you need to know about it before you get one:
What exactly is a hard money loan?
Hard money loans are sometimes referred to as bridge loans or short-term loans. They are commonly used by residential investors who need quick money to renovate the properties they want to sell for extra cash.
The providers of said hard money loans are from hard money lenders. These lenders are generally not tied to a traditional bank or a credit union that lends to other people. They also fund the hard money loans and utilize equity or real estate as collateral.
Why should I get a hard money loan?
There are a few reasons to get a hard money loan. A person may pursue a hard money loan if they do not qualify for a traditional loan. Also, a person may want access to quick money, something which conventional loans will generally fall short in doing.
In other words, if you need quick access to money or need money but do not qualify for conventional loans, hard money loans are a unique source of money you can try.
What are the advantages of hard money loans?
The advantages of hard money loans are also the same reasons people get the loan in the first place.
The first advantage of hard money loans is the fact that the funds provided are given quickly. Traditional loans take weeks or even months to process at a time. On the other hand, hard money loans can be processed within a few short days. In the world of investment, speed is generally the name of the game when closing the deal, and hard money loans can provide the speed they need to close deals successfully.
The second advantage of hard money loans is the fact that one does not need a good credit history to qualify for one. This is because hard money lenders focus on things like a house or a building as collateral. However, there is a catch here. The lender will also take the time to learn of the new value after the property has been renovated to understand how much they should be loaning away.
All in all, if you have real estate and need a speedy loan that does not consider your credit history as much, a hard money loan is a perfect loan to get. You can get it quickly and easily, so long as you have real estate you are willing to use as collateral. That being said, different lenders have different requirements and are willing to lend different amounts. Always be sure to weigh out your options by reaching out to various lenders. This way, you can pick the perfect loan to fit your needs, ensuring you maximize your financial goals while minimizing costs in the process.
DFW Investor Lending is an investor-owned lending corporation that offers unparalleled expertise to assist individuals in meeting their real estate needs. If you are looking for a hard money lender in Dallas, contact us today!