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Is Hard Money Loan Right For You?

If you’re seeking funding for a real estate investment property, but without going through a bank, hard money loan is your best option. Hard money is a popular form of alternative financing issued by private lenders to real estate investors.

Investors can use hard money financing for developing or expanding their real estate projects. Hard money is a short-term loan with interest rates higher than conventional loans. Just like a mortgage, a hard money loan is secured with the real estate property as collateral.

Although hard money financing has seen an increase of late, it’s important to determine if it’s the right financing option for you. Here are some things you need to check before applying for a hard money loan:

You Have Poor Credit

If you have bad credit, you might not qualify for a bank loan. Banks check a borrower’s credit score – among several other things – to determine their financial worthiness. Your credit score is an essential factor that will help banks decide whether to lend money to you. Having a good credit score can increase your chances of getting a bank loan. Similarly, investors with a high credit score may end up getting the best interest rates on bank loans.

On the other hand, hard money lenders are concerned about an investor’s collateral and not their credit score. If a bank has rejected your loan application due to low credit score, you can easily get a hard money loan because private money lenders look at the collateral that backs the loan.

You Want Quick Access to Funds

As banks take a lot of time verifying every borrower’s loan application, financial and personal documentation, loan approval can take months.

Hard money loans are an excellent financing option when you need quick access to funds. In fact, many private lenders provide hard money loans in less than 15 days.

You Want to Pay Off the Loan Quickly

If you don’t like the idea of getting stuck in a long-term loan then hard money loan is the right option for you. Hard money loans are short-term loans. Fix-and-flip loans, for example, can be closed within six to twelve months.

Generally speaking, investors and hard money lenders can negotiate the loan terms, including repayment schedule. Hard money financing provides more flexibility than banks loans with rigid terms and conditions. In case of pre-payment of the loan, private lenders do not impose penalties.

In a nutshell, hard money financing allows easy access, convenience and flexibility to investors. If you’re seeking hard money financing, look no further. At Harper Financial, we offer a wide selection of hard money loans for investors. Get in touch now to find a hard money loan that suits your specific financial requirements.