7 Reasons That Real Estate People Prefer Hard Money Loans
There are several reason and benefits as to why real estate investor are starting to prefer hard money loans over conventional. Flexibility and speed are the two main benefits of using hard money loans to buy property. Real estate deals, in particular, favor this form of finance. Here are a few more reasons why hard money loans are attractive to real estate people, and may give you leverage in your purchase of a new home.
1. Closing a Deal With a Lower Amount
A hard money loan is ideal for negotiating a real estate deal because it opens up access to quick money for those selling the property. This gives the lender the opportunity to negotiate a hard bargain and drive down the cost as a reward for the fast hard money loan.
2. Quick to Arrange With an Easy Process
Applying for a hard money loan is easier than the standard bank loan process and works quickly. There is less bureaucracy to deal with, which streamlines the procedure and makes the transaction a lot easier to negotiate. With this process, the borrower gets a conditional approval from the lender and the money follows in just a few days.
3. Getting Finances Approved With New Issues
Sometimes things get in the way of loan applications, such as previous debts and bankruptcies. With a hard money loan, the lenders are fully asset-based so they can focus on the needs of a borrower rather than a past issue. This makes them preferable when dealing with real estate.
4. The Loan Is Stronger
Hard cash loans are popular with real estate as they offer much more to investors. The loan is particularly strong when there are several bidders for the same property as the hard cash wins each time. In fact, where real estate is concerned, a hard cash loan stands out above the others because it is so fast.
5. Who Needs Credit and Income Histories
When you apply for a standard bank loan the scoring operates on a risk basis, so details of your income, credit score and health are taken into account. This not only takes time, but excludes people who have a lower income or may have missed a repayment in the past. With a hard cash finance arrangement, the focus is on the value of the property. This appears as equity for the borrower and collateral for the lender and does not discriminate on people with a poor credit history.
6. Reinvesting From an Active Property to a New One
There is usually a time limit when negotiating finances on real estate, especially when there is competition from several potential buyers. This can be hard on those people who need time to raise the cash for a purchase. With a hard cash loan, the finances are available to lenders through equity in the property. This means that the lender can process the loan and have cash available within days to seal the deal.
7. Get Finance When You Need It
With a hard cash loan you can get financing when you need to use it. Unlike most other lenders, this works on an equity basis with the borrower in the property. This is a win-win for anyone looking to finance in the real estate world.
Hard cash loans are favored in real estate and could be just what you need to seal the deal on the house of your dreams.
If you are interested in obtaining a hard money loan yourself for you future real estate needs, apply here today!