Do you need some money, and you don’t think you’ll qualify for a traditional loan? Do you hate the process of qualifying for a loan and you would rather just borrow money from an individual or on a different basis? A hard money loan could be perfect for you. Here are some of the details you’ll need to decide if a hard money loan will work for your current financial needs.
Hard money is basically a way to borrow that avoids traditional mortgage lenders. Â Instead of going through a lender, your loan will come from individuals or investors who lend money based on the property you currently own. Basically, a hard money loan allows you to put something up for collateral that you currently own. This is usually your home, a second home, or land that you own. If you cannot repay the loan, hard money lenders will simply take possession of whatever you put up for collateral, sell it, and use that money to pay off what you owe them.
Hard money loans are usually short term. This means that they last between one and five years. If you need money fast, you don’t want to go to the traditional loan process, or you don’t know that you have the financial history to qualify for a traditional loan, hard money can be a great way to get the money that you need. Know that you would not want the loan to last any longer than 5 years. This is because the interest rates for hard money loans are usually significantly higher than those four traditional loans.
As mentioned above, speed is one of the huge benefits of hard money loans. If you need money fast, it’s easier to get a hard money loan then it is to get a loan or the lender has to come through your financial records, verify your income, review your bank statements, and more.
Hard money loans can also be more flexible than any traditional loan you might get. This means that you might be able to change things like repayment schedules. Since you’re borrowing from an individual or a group of investors, it’s a lot easier to speak person-to-person about the loan and its terms then it is when you’re dealing with a large mortgage company.
Getting approved for a hard money loan can also be easier than getting approved for a traditional loan. All you need to know is that your collateral is worth more than the amount that you want to borrow. The value of that property is all that the lender cares about. This means that you can often borrow even if you have a foreclosure or other negative items affecting your credit.
You are interested in talking about hard money loans, contact us at Montegra. Â we help people get the money that they need through hard money loans all the time. We would be happy to talk you through the process and help you decide if this type of loan is a good choice for you.