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Merits of Hard Money Lending

Things have changed and now you can still get a loan without having to go to traditional mortgage lenders and this is what is known as hard money. There are always investors ready to supply you with the money and it might even be an individual but collateral is needed. If you are pressed for time in such a matter then going for hard money will solve your problems. If the traditional lenders have been taking you in circles in matters to do with loan approval then you will find this option amazing. You can be waiting for months for your loan to be approved if you go the traditional way of borrowing a loan not to mention the many conditions to be fulfilled before the process can go ahead. However, this is not the approach that is followed by hard money lenders. As long as you have an asset to serve as collateral you will definitely get the loan approved. There isn’t much attachment to your ability to repay the loan in this case too.

The most important aspect that is considered when you are getting a hard money loan is the value of the collateral you are providing. The repayment period can be just a year or 5 years because these are usually short-term loans. One of the merits of going with this option is the speed of processing. The only thing that will be standing between you and loan approval will be asset valuation. Don’t go in assuming that these lenders repossess items with smiles on their faces because they are always happy when borrowers repay all the money as planned. The fact that there is collateral means they do not have to spend much time verifying your income or even checking through your bank statements which seems important to traditional lenders. Traditional lenders can have you losing out on many great investment opportunities because they took too much time before approving the loan.

Additionally, hard money comes with a lot of flexibility. The agreement will be based on the situation but you won’t get this with traditional lenders. The underwriting process in the case of hard money is done per case rather than following a standardized one as is the case with traditional lenders. This puts you in a great position to negotiate with a particular lender especially on matters to do with the repayment schedule. Because the loans come from individuals, if you get along well you will secure a great deal. Also, the fast approval and higher rates of approval do appeal to many people too.
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