Why Hard Money Lenders Are Better Than Banks

Why Hard Money Lenders Are Better Than Banks

If you are a real estate investor and looking for funds to finance your property or you want clear and better terms in repaying your loans, then going with a hard money lender can be your best choice.

And here’s why you should:

Deals are more important than your current credit score. This means you can secure a loan from a hard money lender even if you have a bad credit score. But with banks, we cannot even think for a loan with a bad credit score. Private money lenders don’t care about your credit history. They only look for a profitable deal. And if you can present one, then you have got a deal!

Get a loan with a hard money lender in a day! Yes, it is that easy. You don’t need to get queued in long lines and talk to dozens of representatives only for your loan to be rejected in the end. Hard money lenders can provide you with the money in a matter of days. You only need to present a good deal to them. If a hard money lender thinks that the house or property has the huge potential to be sold immediately, then he will provide you with the loan.

If you propose a really good deal to your private money lender, There are chances that you don’t need to spend even a single dollar from your own pocket to complete a deal.


How to Find Genuine Hard Money Lenders?

Have you tried all self proclaimed hard money lenders in your town and you are unable to find much difference between the guidelines of these lenders and conventional lenders? Are you in search of a genuine hard money lender, who could fund you in as less than 7 days without much hassle?
If you have answered “yes” to above questions, then you have come to the right place. This article will help you in finding the answers to your questions in an easy way.
Before getting into the discussion zone, let us first deal with the 800 pound gorilla in the room…
So, what are the factors which make a “real” hard money lender company?
There are some basic differences between the so-called and real lenders, which you need to understand first. Apart from that, there are some solid reasons of choosing a true hard money lender over a false one.
Difference #1 – A true hard money lender isn’t interested in your credit history. A real lender will never put a condition that if you don’t have a good credit history, you won’t get financing. There are many hard money lending companies, which will say that they don’t care about your credit but at the end of the day, they’ll say that their minimum credit score requirement is 600.
The reason behind this is these lenders are packaging their loans for Wall Street or banks, so ultimately they’ll have to conform to all the legal requirements set up by these traditional lenders, which can’t be afforded by a person who has a bad credit history.
Difference #2 – On the other hand, a real lender ONLY cares about your collateral you are willing to invest in. They will get your property evaluated by professional independent evaluators, who will look at your property without any preconceive notions. They will give a purchase price, repair cost and estimated after repair value (ARV) of the property to the lender and if they find it good enough, they will fund you there and then.
Whereas, the imposters will put your credit score, job history, salary and other finances at the top of their loan requirements list before offering you a loan, which is exactly same as conventional lenders work.
This shows that there is a huge difference between a real lender and an imposter.

Get Home Loans With Bad Credit: Online Lenders Can Help You Succeed

For many citizens, the chance to own a home is not something to pass up. Owning a home is the best way to build wealth over time and a true measure of a person’s accomplishments. However finding home loans with bad credit may make this chance more elusive than ever. For borrowers with poor credit, home loans may seem like just another dream. However, there are ways to get the mortgage loan you need through online lenders who specialize in high risk lending.

Credit Is Still Important

Many people wonder why a simple three-digit score is so important when trying to buy a home. It’s just a number after all, right? Wrong. The Fair Isaac Corp. (shortened as FICO) developed the credit scoring system as a means to help lenders assess the likelihood of default on loans. The system take several aspects of your credit: your asset to debt ratio, your past history of repayments, bankruptcies, foreclosures, etc. and uses that to generate a score that tells lenders a lot about you with little fuss.

Basically, the point of a credit score is to serve as a short cut for borrower evaluation. Bad credit means that the borrower has had problems with money in the past and may have problems in the future. Therefore, when looking for a home loan, poor credit is an important element that a lender will use to assess whether or not you will be able and willing to repay the loan on time and in good standing. If you do not do this, the lender loses money.

Lenders Willing to Take the Risk

Even if you have reformed bad habits or, worse, your poor credit score is a result of factors out of your control (such as lay-offs or medical bills) most traditional lenders will still consider you a rick when considering you for a home loan. With bad credit, no matter the reason for that poor credit, you are at a disadvantage with most lenders.

There are clear exceptions to this rule, however. Many lenders who operate online are willing to work with people whose credit scores are lower than ideal. Why? Many of these lenders understand that in cases where bad credit is a thing of the past, a second (or even third) chance is warranted. These lenders will give home loans to those with bad credit because they believe you have the ability and willpower to succeed.

There Are Still Penalties

This does not mean that you are on even playing ground with other borrowers however. Because of your bad credit, home loans will come with certain penalties or other circumstances that will offset the risk your bad credit creates. Principally, this means that your interest rate will be higher than those low rates you see advertised all the time. There may also be certain fees for late or missed payments that are higher than those on traditional loans. It is important to read all the fine print on your final loan papers in order to understand all of these circumstances.

The good news is that borrowers with bad credit can still get home loans. With poor credit, it is easy to get discouraged, but it is not necessary. Consider all the options in front of you and start your search today!


VA Home Loans With Bad Credit: Special Qualifications and Tips

Serving the country as a member of the armed forces comes with many benefits. The 1944 Serviceman’s Readjustment Act, which many also know by the term GI Bill, was created to help armed forces veterans to get ahead after their service time has ended. One such benefit offered by the GI Bill is VA home loan assistance. This program allows vets to purchase a home with a low or minimal down payment. The VA will guarantee 25% of the loan instead. Also, those with bad credit are also able to find relief through VA loans.

Get a VA Loan: Meeting the Qualifications

The benefit of the VA home loan received through the Serviceman’s Readjustment Act (GI Bill) is that there is a guarantee from the department of Veteran’s Affairs (VA). This guarantee eliminates much of the risk associated with bad credit loans or low down payments. You can get a VA home loan with bad credit. However there are specific criteria that you need to meet as well. These qualifications include the following:

• No history of loan default within the last twelve months. Defaults in the distant past, though considered, can be disregarded if you have proven that you have reformed from your past mistakes.

• No bankruptcies on file in the past two years. Again, a bankruptcy on record will matter, but if you have made changes and allowed at least two years to pass, you can still get a VA home loan.

• Proof of current, gainful employment with a steady and reliable income. You need to display that you have the ability to pay for the home loan you seek.

Disabled Veterans

Armed service veterans who are currently disabled and receiving benefits due to their disability may still qualify for VA home loans with bad credit. This is because there are special additional programs that are offered for disabled vets. By speaking with a VA loan professional, you can see if you are able to get a VA loan with bad credit as a disabled veteran.

Improving Your Credit Score

Among the most important steps to take before applying for VA loans is making changes in your personal financial habits in order to increase the credit score you currently have. Simple steps that you can take in order to achieve this include consolidating debts and setting a clear budget to follow each month. Also, make sure that you have each month’s payments clearly marked on your calendar in order to avoid late payments that may make a bad credit score go down even more.


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