construction loans

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Real estate projects can feel overwhelming to finance. In many cases, a construction loan only makes the process more difficult. Construction loans are generally considered to be highly risky ventures and often cause loan officers and others in management to look closely at each and every detail of a project before they make a final determination.

These transactions can result in mountains of paperwork, which can be both time-consuming and costly if you happen to be the borrower. Because of this, you may be considering a hard money loan to fund your next construction project.

Traditional Lender Construction Loans vs. Hard Money Loans

Regardless of the trends in the real estate market, investors will always need money to fund their projects. This is where hard money loans come in. Traditional lender construction loans can easily become tied up in paperwork and other obstacles can also get in the way of a timely loan closing.

Hard money construction loans are a great option for those who need a loan to fund their project but who may not be a good fit for a more traditional lender. They can also be a good option for those on a tighter deadline who don’t care to wait around for a more traditional loan to go through.

Is a Hard Money Loan Right for You?

The typical hard money loan term is six months to a year. However, it is possible to get longer terms in certain circumstances — up to two or three years. This term length is one of several factors you’ll need to consider when determining if a hard money loan is right for your project. Additionally, you’ll need to consider when you need the money for the project, what sort of loan structure you’re looking for, and whether you can qualify for the type of loan you’re looking for.

In the end, the right type of loan is going to depend on your priorities, what type of project you’re looking to fund, and your overall financial circumstances. Figuring out what type of loan makes the most sense for the project is critical and will help you see long-term success with the project you’re looking to undertake.