Hard money loan is a financing offered by non-institutional lenders. Nowadays, several hard money lenders provide quick funding at competitive interest rates. However, borrowers ought to carry out a detailed check on lender’s business and reputation. As you do your research, you should know the following benefits of hard money lenders.
Benefits of hard money loans
This is one of the major benefits of seeking a hard money loan. In fact, an investor can get a pre-approval within a day as long he or she has submitted the required documents to the lender. The majority of hard money lenders just focus on the asset has a good market value and whether the borrower’s equity is 20% or more. Getting financing in less than a week is possible. This is quicker as compared to seeking normal loans. When looking for a hard money lender, the key factor to consider is how quickly.
A private lender offers you an opportunity to create a lot of freedom to come up with a customized repayment plans. However, with a large financial institution, this will not be a problem. You will have to accept payment terms as your bank sets them. Fortunately, a private lender allows you to discuss and agree on the repayment plan, which you believe is ideal for you.
When you apply for funding from traditional financial institutions, you are expected to meet certain hard-set requirements such as experience and income history. It is not a secret that bank approvals are quite a cumbersome procedure. The good thing about seeking a loan hard money lender is that the application process will not overburden you. As long as you have more than 20% equity stake, there is a high chance that you qualify for a good amount of loan.
Credit history not an issue
Traditional lending institutions take into account your credit history. In fact, your credit rating is likely to determine whether you can get a loan or not. On the other hand, private lenders put emphasize on weak credit rating. This is because they base their loan approvals on the borrower equity, property value, and other factors. As long as you can meet the criteria, you have a good chance of getting the funding.