What Are The Benefits of a Hard Money Loan?
Here Are Five Benefits That a Hard Money Loan Can Provide For You
1. You Get Approval Fast. One of the biggest benefits offered by a hard money loan is the ability to get pre-approval for the loan in just days allowing you to better your chances at securing the property you want. Make sure you have all documents required by the hard money lender so that this process is quick.
2. Flexible Payments. When you have a private lender that you are working with, they allow you to have more freedom to create a payment plan that works for you because they already have security in the asset you put up for collateral for the loan. Whereas with a regular mortgage lender you must agree to their terms of repayment and whatever amount they establish you have to pay.
3. Fewer Requirements Needed. When you apply for money from a bank, you have to meet all the requirements they have in place in order to get the loan in the first place. When you choose a hard money lender there won’t be nearly that many hoops for you to jump through for you to secure your loan. As long as you have a high-value asset with a minimum 20% equity stake, then there is a really good chance you will be approved for the hard money loan you want.
4. Zero Prepayment Penalties. When you take out a home loan from a bank, there are prepayment penalties if you pay your loan off early. Yes, that’s right you have to pay more if you pay off the loan prematurely. With a hard money loan, the majority of the lender’s are not going to charge a prepayment penalty. So, if you make the decision to pay the loan off early, you won’t have to worry about how you are going to pay additional charges for the hard money loan.
5. Credit Scores Aren’t a Huge Factor. With a private lender they don’t worry so much about your credit score because you are securing the loan from a piece of property you already own. Your loan will be based on the value of the property and your borrower equity not so much your credit score.
As you can see, there are so many benefits to a hard money loan. If you are trying to find a way to secure funds fast, then be sure to consider giving a hard money loan a try.