3 Benefits of Taking Out a Hard Money Loan
Being able to take out a loan is beneficial for so many reasons. After all, the right financing can lead to purchasing your dream home or investing in your first property. That said, depending on what you’re looking to accomplish with your loan, some choices are more ideal than others.
This is especially true when you consider all of the advantages of taking out a hard money loan. Delve into the benefits of this type of funding and discover the positive impact it can have on your next venture.
Lenient Loan Requirements
In discussions about the benefits of taking out a hard money loan, most are quick to mention that this type of loan comes with minimal loan requirements. This is advantageous indeed, especially if your financial situation is tricky. To elaborate, unlike bank loans, hard money loans typically don’t require the loanee to jump through hoops to get approval.
Plus, hard money lenders will consider you even if your financial history has a few blemishes like bankruptcy, bad credit, or loan modifications. Granted, you will have to prove to your lender that you’re worth the risk they’re taking on. Hard money loan lenders usually require that you have:
- Efficient equity in your property of interest
- Proof that you’re able to make monthly payments
- A plausible exit strategy and ample experience (if needed)
Of course, working with a private lender means that they’ll have their conditions, too. So, be prepared to do address whatever they need from you. Meeting these requirements will make them feel comfortable taking you on.
Quick Approval and Funding
Of course, once requirements are met, hard money loans are generally approved pretty quickly. In fact, in some cases, the entire approval process can take place over one day. From there, the funds will typically be ready for use within 3-5 days of approval.
This rapidity is one of the many benefits of taking out a hard money loan. It’s also why they’re so attractive to property investors and house-flippers. So, if you need funding quickly, hard money loans are a fantastic option. Just be sure to meet your lender’s specific requirements before you apply.
Provide Financial Backing for Unique Situations
Another advantage of working with a hard money lender is that these lenders will provide loans that larger financial institutions have no interest in funding. To illustrate, perhaps you’re looking to start a fix-and-flip business. You’re excellent at what you do, and you have a capable team. But because fix-and-flips often involve short-term loans, your bank won’t touch it. As a result, you don’t have the financial backing you need to get your business off the ground.
In this case, a hard money loan is among the best options available. To start, your lender is counting on a short-term loan. Plus, as long as you can pay them back and adhere to the conditions of your loan, you’ll be able to get the funding you need quickly. We hope this guide opened your eyes to the variety of loan options available to you.
If you reside in the Biggest Little City in Nevada and are interested in hard money loans, give Streamline Mortgage a call. We’ll answer your questions and get you set up with some of the best hard money lenders in Reno. That way, you can get the funding you need and be well on your way to making your investment dreams a reality.