Hard money loans offer many benefits. They are useful in many different scenarios. Here are some reasons why you may want to submit your hard money loan proposal today.
Low Credit History
Hard money loans are useful if you would not normally qualify for normal loans. If you have low credit, you will likely still be able to qualify. According to Next Advisor, this is because hard money loans are asset-based. This means that they use an asset such as the house itself as collateral. Similarly, a high debt to income ratio will also not disqualify you from a hard money loan.
Hard money loans can be approved extremely quickly. This is because they generally don’t require appraisals, background checks, or other similar documents. They can do this because hard money loans are funded by private investors and companies. Therefore, they are not bound to the same procedures as traditional lending institutions such as banks. This can be extremely beneficial if you have a house renovation project that needs to be completed soon. Similarly, it is beneficial if your business needs funding as soon as possible. Hard money loans can even be approved in as little as a day. Generally, they are accepted within a week.
Hard money loans are also useful if you need a short-term loan. Traditional loans are normally designed for periods of over 12 months. However, according to Next Advisor, hard money loans normally only last 6-18 months. This means that hard money loans are useful for short-term projects such as house flipping. According to News Daily, nearly half of house flips were purchased using financing. House flippers normally only need a short-term loan that lasts for the duration of the renovation. Even so, it is possible to have a hard money loan extended longer than 18 months. It must be approved prior to signing the contract.
There are many reasons to consider a hard money lender. Your credit history and debt to income ratio do not matter as long as you have a house for collateral. Further, hard money loans can be secured in as little as a day. Finally, hard money loans provide shorter-term loans than banks. If you find yourself in one of these scenarios, consider writing up your loan proposal and getting a hard money loan.