Reasons Why Real Estate Investors Prefer Hard Money Loans!
Category : Hard Money Loans
Hard money is a type of financing used to finance properties for short-term. Nowadays hard money is a
great option for investors to fund real estate deals. If you have a bad credit score and planning of
getting a home loan, the chances of you getting the loan is very slim. Nowadays getting approved for a
home loan has been a challenge. Standards on lending have been tight which means if you don’t have a
good credit score or if you don’t have enough income and resources, you’re bound on getting
disapproved for the loan.
Residential hard money loans provide you with the fast funding and loan terms that you need to help
you reach your real estate goals. Terms of hard money loans are more flexible rather than traditional or
long-term mortgage loans. The advantage of a hard money loan is you can get the entire amount of
money you will need to complete a deal. Although most hard money-lenders loan 65 or 70 percent of
ARV; that is not the purchase price, that is how much the house will be worth once you fix up the
home.
Hard money lenders are well known on bridging the gap missed out by traditional lenders. That has
been the reason why they have become well known option for investors nowadays. Hard money
lenders, unlike traditional lenders, place little weigh on credit score. The focus of the hard money
lenders are on the property fundamentals and equity position. Though do expect that hard money loans
will cost higher compared to traditional loans, although if you’re an investor eyeing on a great
investment opportunity, hard money has lots of worth for you.
Which to choose – traditional or hard money?
While considering and checking which you should choose, if you’ll go the traditional or hard money,
here are pointers that might help you:
Traditional loans rates are really low. If you are able to get a traditional loan, than you are starting off
with a big advantage. Only the process of getting it is really difficult almost impossible if you have low
credit score. Also, there are lot of documents requirements in traditional loans. The process of
traditional loans usually take more than 30 days.
On the other hand, hard money loans do not really put much weigh on you credit score. The focus is
on the equity and property fundamentals. Rates are higher compared to traditional but the good thing is
if you are an investor, you can get an access to the funds on a very short time or may be in a day. The
process of hard money loans take not more than 5 days.
Conclusion:
If you have a bad credit score and hungrily need fund to fix your real estate deal, don’t waste your time
into getting traditional loans because it’s almost impossible with bad credit score. In this situation, only
hard money loans can help you to fix your deal quickly. Don’t be afraid to finance real estate with hard
money if that is your only option.
For more information about hard money lending, visit our website MagnaLoans.Com or call us today
on (323) 655-6888 or send us an email at info@magnaenter.com