The Perks of Dealing with Hard Money Lenders

Obtaining financing for your real estate investing business is now relatively easier compared before. Because of the growing number of hard money lenders in the country today, you can easily secure funds for your investment properties, even if you don’t have a good credit score.

Seeking the assistance of lenders of hard money can be more beneficial to a real estate investor compared to obtaining bank loans from banks and other lending institutions. Since negotiating with these non-traditional lenders is like a walk in the park, you can save a lot of time and energy, which you can use in doing other meaningful activities.

Aside from helping you acquire money stress-free, listed below are some of the advantages of dealing with hard money lenders:

1. No credit checks – Most lenders of hard money perform little or no credit checks at all because of the simple reason that they are not usually concerned with a borrower’s creditworthiness. As we all know, a hard money loan is a type of asset-based financing in which a collateralized property’s after repair value (ARV) is used to assess a loan application. Thus, these private lenders based their decision on the property itself, not on the borrowers.
2. Repair costs are covered – Some lenders of hard money are willing to shoulder all the expenses incurred from renovating an investment property. Such a scenario can be advantageous to those who rehab houses for profit since they can finish the repairs without spending their own money.
3. 100% financing is possible – While most lenders of hard money will finance 60% to 70% of the value of the property after it has been repaired, there are some who offer 100% financing on some deals.
4. Loan approval is quicker – Compared to those provided by banks and mortgage companies, hard money loans has shorter turnaround time for loan approval. A loan application can be approved in a few days time, with some lenders releasing the needed funds within 24 hours after the submission of necessary documents.

Hard money loans, however, have higher interest rates compared to conventional mortgages. Most hard money lenders also ask for originations fees, which are used to process a loan application. But according to certain experts, interest rates are relatively lower than before. Because of the stiff competition, many private lenders are forced to reduce their rates to attract potential clients.

Meanwhile, if you are in need of financing and want to learn where you can find the best hard money lenders out there, log on to REIWired.com.