Today’s lenders often demand a lot of information and time from their clients. Most institutions will only give loans to people that have excellent credit and relatively high incomes. To make matters worse for consumers, lenders can take weeks deciding whether to extend loan offers.
Avoiding traditional loans and focusing on hard money loans can make it much easier for people to access the money they need for expenses like medical care, car repair, and real estate.
What Is a Hard Money Loan?
Hard money lenders don’t care about a person’s credit history, credit score, or proof of income. They only care about collateral. As long as the borrower has enough collateral to cover the loan’s value, the person can get the money quickly.
In many cases, people can use the item they plan to purchase as collateral. For example, if a real estate investor needs money to purchase, improve, and sell a house, the house fills the role of collateral. Keep in mind that lenders will not offer more money than the property’s value. If the property has a $100,000 value, then it’s only possible to get a loan up to $100,000.
The lender, however, needs to know that he or she can sell the collateral for the loan amount.
The option to use real estate as collateral makes hard money loans particularly attractive to people who flip houses for profit. Instead of risking their own money, they can borrow money to buy property. Assuming that real estate investor sells the home for a significant profit, they can still earn cash after repaying the loan and its interest.
The Benefits of Hard Money Loans
Hard money loans have several benefits that make them more attractive than traditional loans and mortgages.
It’s Easier to Get Approved for a Hard Money Loan
Hard money lenders don’t need to evaluate your creditworthiness. They just need to know that borrowers own property that covers the value of the loan.
People who get turned away by traditional lenders often find that they get approved by hard money lenders.
Borrowers Use Collateral for Their Loans
Since hard money lenders don’t care much about income levels and credit scores, they rely on collateral to protect their investments.
Hard money lenders typically try to keep their loan-to-value ratios fairly low (between 50% and 70%). Borrowers, therefore, can access up to 70% of an investment property’s current value. If borrowers need to borrow more money, then they can use other assets as additional collateral.
Common types of collateral include:
By using a combination of property as collateral, borrowers can increase the amount of money they get.
Hard Money Loans Have Flexible Terms
Since hard money loans come from private lenders, borrowers can negotiate flexible terms that benefit them. For instance, a borrower may request a custom repayment schedule or to avoid origination fees.
Most hard money loans are short-term loans that get repaid within 5 years. Borrowers and lenders can negotiate to find a loan term that meets both of their needs.
Borrowers Can Access Cash Faster With Hard Money Loans
By eliminating the lengthy approval process that banks use to decide whether they want to lend someone money, borrowers can access cash much faster by choosing hard money loans. The lender may want to take some time to evaluate the collateral’s value. The evaluation process usually takes much less time than the approval process that traditional lenders use.
Find a Hard Money Lender Through LenderMatrix
Traditional lenders don’t offer hard money loans. Instead, borrowers need to find private investors or private investment groups. Unfortunately, beginning real estate investors may not know where to find the hard money loans that they need to purchase properties.
LenderMatrix makes it easy for anyone to find a hard money lender with agreeable terms and rates. Borrowers can simply use the lender directory to find the loan products that they need.
Using LenderMatrix also helps ensure that borrowers find legitimate lenders. The website only works with lenders interested in business and investment loans. Focusing on a variety of business loans makes it possible for LenderMatrix to streamline the lending process. Borrowers don’t have to sift through offers for mortgages, lines of credit, or personal credit cards. Instead, they can spend their time comparing offers from qualified hard money lenders.
LenderMatrix doesn’t require users to register with the website until they’re ready to accept a loan. Borrowers can review hard money lenders in the database without any obligation. When they decide to accept an offer, they can open accounts and start communicating with lenders.
Real estate investors need to buy and sell properties quickly to earn money. Traditional lenders make it nearly impossible for most real estate investors to access the money they need within a timeline that helps them generate profits. With LenderMatrix, investors can secure the funds they need as quickly as possible.
Find a hard money loan that will help you make more money from your real estate investments by visiting LenderMatrix, today. It doesn’t cost anything to use the lender directory, so you don’t have anything to lose.