A hard money loan, or HML, is a type of creative financing wherein lenders rely on the after repair value of a property to approve or reject a loan application. Despite its negative-sounding name, such a loan is easier to obtain compared to those provided by banks and other traditional lending institutions. In fact, it only takes most hard money lenders a few days to decide on a loan’s eligibility.
Most HMLs are provided by private lenders and small lending companies. The ones who usually avail of them, on the other hand, are real estate investors and borrowers who can’t obtain conventional mortgage financing because of their bad credit history.
When it comes to buying investment properties, it would be better for a real estate investor to acquire the assistance of hard money lenders. Why, you ask? Listed below are some of the reasons why HMLs are the perfect loans when acquiring real estate:
- Because hard money loans are asset-based, most lenders are not concerned with a borrower’s credit score. As long as the property can attract a good deal, they will approve a loan application. Thus, an investor can still obtain financing despite his bad credit.
- Hard money lenders don’t ask for a thorough documentation of your financial history. Most of them will only ask for W-2s or tax returns and conduct an ocular inspection on the property for which the loan is being made.
- Real estate investors can expect a shorter turnaround time for the loan to be approved since they don’t have to deal with a processing team or panel. Therefore, if you’re in need of quick financing because you want to buy a property that caught your fancy, you don’t have to wait for weeks or months just to get the funds you need.
- Most hard money loans provide coverage for a property’s repair cost. This is the perfect setup for a rehabber since he doesn’t have to spend a huge amount of cash up front to transform a fixer upper home to a thing of beauty.
One good way to find hard money lenders for you real estate investing business is to ask referrals from people who have worked with them. These people include your fellow real estate investors, accountants, settlement attorneys, and title companies.
You can also surf the Internet since most lenders of HMLs advertise their business online. You can visit RehabHardMoney.com, a site that brings together hard money lenders and borrowers together. If you want to obtain hard money from trustworthy and reliable lenders, log on to www.RehabHardMoney.com today.