Everything You Need to Know About Hard Money Lending
A hard money loan is one of the most suitable options for real estate investors who need money to invest in real estate property. It’s an asset-based loan. When the traditional loan process fails to offer you a loan, approaching a hard money loan option is an ideal decision.
Traditional loan lenders generally look for good credit scores when lending money. In the event when the buyer is struggling with a bad credit report, it’s very hard for him to get a loan from a traditional lender. That’s when hard money lenders come into the picture. This loan is contracted for a short period of time, usually, 6-24 months.
A real estate investor would never want a long-term loan because the interest rates charged for long term loans are very high and complex to pay. One of the biggest advantages of availing a request for a hard loan is that the speed at which you can close the loan. Basically, a hard money lender allows real estate investors to invest in property without making credit report a big deal.
What is hard money?
To avail a loan, you have to show your credit score and other documents because most lenders only lend you a loan after seeing your income and credit score. If you have a great credit score, your loan is easily approved. However, if you have a poor credit score, it’s very tough to get a loan through conventional loan approaches. Hard money lenders take a different approach; they lend you money on the basis of collateral security. If anything goes wrong, like in case you’re unable to repay the money, they can get their money by selling your collateral securities.
Why use hard money?
Hard money is an ideal option if you know you can make money from the investment, no matter what your current credit score is. Other reasons have been mentioned below:
Speed: Because lenders mostly focus on collateral securities, getting a hard loan is quicker for the buyer.
Flexibility: Hard loan lenders offer you more flexibility to repay money as compared to a traditional loan.
Approval: When it comes to taking hard money lending in Scottsdale, the approval process is very simple and hassle-free. You simply need to submit some basic documents, and once the documents have been submitted, you get your loan very soon. Be sure that if you have a security and have the capability to repay, hard money loan is the best option for you.
The above-mentioned points make it quite clear that hard money lenders can be an apt choice when you’re concerned that your bad credit scores would get your loan request rejected when you go to a traditional bank to seek a loan. If you know how to invest in real estate and are need of some investment capital, you can always look for the best hard money lending in Scottsdale. For more information, you can always go online and search the web.