Are you looking for hard money loans?
Are you still hesitating just because of the higher interest rates?
Well, let us tell you, hard money loans might charge you higher interest rates, but they also offer a bunch of benefits that you can not expect from traditional bank loans. Here in this article, we will talk about that.
Benefits Of Hard Money Loans
Here are the major benefits of hard money loans when buying a new home or residential property.
Benefit No. 1: Faster Funding
When it comes to the hard money loans for real estate, the application process is pretty simple. You just need to fill out a loan application form, and then you could be funded after conversing with the lender for a few minutes.
On the contrary, if you are going to make an application for traditional bank loans, you will need to fill several pages. Plus, it will take several days or at least a week to get the loan approved. Some lenders even promise to have your loan approved in a matter of minutes.
Once your hard money loan is approved, within a week or two, you can expect to get the money. Here, we also like to mention that in case you need a hard money loan on an urgent basis for a real estate project, you can get the funding within 3 to 5 days from reputable financiers.
If you’re expecting to inherit money once a probate process is finished, you can also consider a loan against inheritance. This way, you’ll skip most of the complex paperwork and get a part of the cash even faster.
Benefit No. 2: Make An offer Stronger
When you are making an offer with a hard money loan, your offer is going to appear longer, especially in case there are a number of interested investors with usual bank loans.
Traditional banks are mostly known for pulling financing from buyers, and that too during escrow, along with killing the deal.
Benefit No. 3: No Need Of A Perfect Credit Score
Before approving your loan, your bank will always ask for a proper income history and also a perfect credit score. If you have a poor credit score or you do not fulfill the criteria, the bank will not approve your loan request.
At the same time, hard money loans do not need all these formalities. Their main focus is on the property and the downpayment you are making as the borrower. If the lenders are comfortable with the equity and evaluation, they will approve your hard money loan.
Benefit No. 4: Quick Closing And lower Price
When we are talking about hard money loans that are particularly designed for real estate, we must mention that if you pay cash, you will be able to get a lower price. Apart from that, you will also get a promise for a shorter escrow period and closing.
It means at the same time; you are getting a quick closing and lower price.
Benefit No. 5: Leverage To Invest More
When you are buying properties with cash, you are actually opening the gate for a number of opportunities.
At the same time, paying cash also can limit the number of investments. Here, hard money loans can help you a lot by providing you with up to 75% of the financing for your real estate. This way, you will have money in order to secure properties along with retaining more for completing your other projects.
Benefit No. 6: Get Finances When Traditional Banks Fails
Most of the conventional banks provide loans to a single borrower, and that too up to 4 times. Meanwhile, hard money loans do not have such limitations. They are only bothered about your equity in the particular property.
Benefit No. 7: Reinvest Equity From Your To Another Property
When you are getting opportunities, you actually have really limited time to act as per that. In case you are raining money for making a down payment or simply buying the property, there will be really few options in your hand.
Cash-out hard money loans are some of the opportunities for real estate. You might qualify for such type of loan if you have enough equity in your property.
Benefit No. 8: Flexible Lenders
Often, bank lenders are too rigid and also have really strict rules and regulations. Most of the time, due to these limitations, getting a loan becomes tough. Though hard money lenders also have some sort of regulation, they are not strict and pretty flexible.
Benefit No. 9: Loan Approved, Even With Issues On Record
In case you have any issues, like bankruptcy or foreclosure, there is a high chance that you will not get a loan from a traditional bank. Again, hard money lenders typically focus on your equity on the property and not at all on your past record.
Benefit No. 10: Get Real Estate Advice From Professionals
Hard money loans are typically designed for real estate projects. So, when you are going to take a loan, they can also provide your expert advice or opinion about your property and project.
It means, along with getting a loan, you are also getting real estate advice.
