Obtaining money for an upcoming project can be hard if you choose the traditional route which utilizes a bank or credit union. It can mean a lot of time spent sitting in an office, signing too many papers, and playing a waiting game that you may lose. An exciting discovery for businesses and individuals looking for a loan is there is another way.
Hard money loans are unique in that they allow individuals and businesses to receive a loan when they would have been rejected by a traditional lender. This type of loan does have cautionary characteristics but still stands strong as a way of increasing your financial power. According to the chief economist of Lending Tree, “If you’re not able to access a traditional loan, then maybe there’s an opportunity here.” For the estimated 68 million people who have bad or low credit scores, according to Vantage Score, this opportunity could not come at a better time.
Let’s take a deeper look into three ways to increase your financial power with a hard money loan.
Streamline the Process
No one likes to spend their free time in an office waiting for answers. Traditional lenders, such as banks and credit unions, are basically playing the middleman of the loan process. In essence, you must talk to a loan officer who then talks to the bank. This “conversation” can take weeks. Underwriters must construct your loan portfolio and write out the terms. This all sounds complicated, right?
In order to gain financial power, take out the middleman. Take control of what you need and how you get it with a hard money loan. Because you will be doing business with the lender themselves, there are no waiting periods to deal with. No, let me call the corporate office. No time spent waiting on underwriters.
Paperwork is another area which can get cumbersome. Hard money lenders will have this down to a science. There are fewer restrictions, therefore, requiring less documentation. In layman’s terms, hard money lenders are more concerned about the collateral than the documents. A fine-toothed comb is not needed in this process.
Flexibility with Hard Money Loans
Everyone needs flexibility in their lives. Why should this be any different in your finances? Hard money loans offer flexibility in which the receiver of the funds can determine how long they need to repay the loan. Because you are dealing with the lender themselves, there is some leniency with the terms. Most lenders allow for repayment times which range from 12 months to five years.
The ability to have a voice in your financial present and future is vital. It gives you the power to negotiate the terms. There are no requirements on terms, leaving you freedom and flexibility.
As we have already established, a hard money loan is a way to obtain money quickly for individuals and businesses. This is especially true for real estate entrepreneurs. For example, flipping houses have become big business in the past decade. To flip a house, one must be bought quickly, remodeled, and then sold. Since fabulous deals don’t hang around long, buyers need to snatch them up quickly. With a hard money loan, flippers have a way to get the money they need quickly and on a short- term basis. Long term this could mean more profit in their wallets and better chances of continued success.
We all need help from time to time. Sometimes we need help paying the bills or making our dreams come true. When times like these arise, it should not be hard to get help. It should not be difficult to find a way to stand on our own two feet.
Hard money loans are a unique way to get the help we sometimes need. They allow individuals and entrepreneurs to streamline the process, have flexibility, and use leverage. Hard money just makes sense. If you have collateral or assets, then you can take advantage of these loans. They are definitely worth considering. In order to obtain a hard money loan, contact a lender and begin living your dreams.
Prittchard, Justin. The Balance. n.d. https://www.thebalance.com/hard-money-basics-315413.
Wiebe, Jamie. Magnify Money. n.d. https://www.magnifymoney.com/blog/mortgage/the-pros-and-cons-of-a-hard-money-loan/.