Hard Money Loans—Top Reasons Why Real Estate Investors Prefer Them!

 

Hard money loans are given by private lenders and are approved against a collateral. They are an excellent financial tool that all real estate investors should keep in mind.

In this article, we’ll talk about the top reasons why real estate investors prefer hard money loans.

Quick Approval and Funding

The main reason why real estate investors prefer hard money loans is the fast approval and funding involved. Typically, all you need to do is fill out a loan application to get approval. Moreover, you may also be required to have a few minutes’ worth of conversation with the lender for your approval and that’s it!

If you compare this to the conventional loan process, in which you have to submit an application to the bank to get a response few weeks later, hard money loans are quite convenient.

No Need for the Perfect Credit Score

When you submit a loan application in a bank, they evaluate your credit score and income statements to make the decision for loan approval. In case you don’t have a good credit score and appropriate income, you have very little chances of getting the loan.

In hard money loans there is no such need for the perfect credit score and income statement. Instead, the collateral as well as the down payment are enough to get approval, which is quite beneficial to a real estate investor.

Get More Deals With Cash

As a real estate investor, when you purchase real estate with cash you can avail various benefits. You will get most of your offers accepted with cash, and you may buy properties at auctions with the cash. However, there is just one caveat: there is a limited amount of deals you can do with cash. You may miss a great house because your money would be tied up in another deal.

When you use hard money loans, you get 75% LTV financing. In this way, you may be able to have enough funds on hand to make other purchases.

Wrapping Up

Hard money loans are very beneficial for real estate investors. They are given against a collateral, usually the property that you’re buying, quick in approval, are not affected by credit score or income, and allows real estate investors to get more deals.

In case you’re looking for hard money loans Houston, we highly recommend getting in touch with Investor Lending!

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