Statistics show that the average American has $38,000 worth of debt. This number does not include mortgages, which would make it much higher. It comes as no surprise that most people are turning to hard money lenders in Georgia for credit.
A hard money loan is a secured type of funding in which the borrower receives credit using real property as security. Individuals or investors can use this loan as a type of private lending.
Why turn to a hard money lender?
With Americans carrying so much debt, it comes as no surprise that many people have a poor credit score.
When borrowing from banks, your credit score determines if the loan is approved or rejected. The lower your score, the lower your chances of getting credit.
So, what is a credit score?
It is a number that shows your creditworthiness. It reflects the level of risk involved in giving you credit.
If your credit rating is low, it does not mean that you cannot access credit. Hard money lenders in Atlanta GA are open to giving bad credit loans. Their main interest is on the value of the collateral, and will usually pay little or no attention to your credit rating.
Unlike traditional loans, hard money loans get quick approvals. With the collateral verified, they do not consume time on endless paperwork and loan committees. They can come in handy when you need a quick source of money.
Hard money loans Atlanta GA provides are also flexible. Unlike banks, they are not under strict regulations and will thus treat each loan differently. If, for instance, you are borrowing from individual hard money lenders, you can negotiate the repayment schedules and work with what’s suitable for you.
Since the credit score plays a minor role in hard money lending, you can get as much credit as you want. As long as you have a high-value property that can match your borrowing, you are good to go.
Borrowing from hard money lenders in Georgia
Here are a few tips you should use when selecting a hard money lender:
- Carry out a background check: Some lenders will use deceptive methods to coerce you into taking loans you cannot afford, with the aim of repossessing your property. To avoid being duped, you need to work with someone with credibility and some history as a good lender. Ask previous clients about their experience with the lender.
- Check the terms: You need to carefully study the loan terms before signing the contract. Different hard money lenders in Georgia will offer different terms. Ensure the interest rate and payment plan is affordable. If it’s unmanageable, you could end up defaulting and losing your property.
- Have proper documentation: To further avoid predatory borrowing, ensure that there is proper documentation. The document should show the amount you have borrowed and under what conditions. It should be a document that you can legally enforce in case the hard money lender goes against the terms of the engagement.
Whether your credit score is poor or you are in need of quick money, an Atlanta hard money lender will provide real estate loans promptly and at flexible terms. To avoid losing your property unfairly, ensure the lender is credible, has a history in private lending, is ready to put the agreement in writing, and offers favorable conditions.