If you’re in the real estate business, there’s a good chance that you will need to secure financing to complete your projects. But what if you can’t get financing from a bank? In that case, hard money loans by Hard Money Lender Boston might be the perfect solution for your project, and here’s why. First off, hard money loans can be approved in as little as 48 hours, so you won’t have to wait long until your project can move forward.
Overview
Hard money loans are used by investors, such as house flippers or developers who renovate properties to sell, in order to receive fast funding for short-term needs. Although hard money loans have received a bad reputation due to their association with subprime mortgages and poor lending practices, they can benefit some real estate investors if used correctly.
Here’s what you need to know about hard money loans, including the pros and cons of these short-term financing options, in order to decide whether or not they are the right fit for your investment needs.
What is a hard money loan?
A hard money loan is a type of short-term loan that usually has a low interest rate, but is secured by physical property. They can be used for any purpose – such as to purchase a house, renovate it, flip it or lease it out.
A hard money loan is different from other types of loans because the borrower does not need to provide financial statements or proof of income in order to qualify for the loan. The lender only needs to verify that the borrower has enough equity in their property to secure the loan.
The main reason people choose hard money loans is that they typically have lower interest rates than traditional mortgages. But borrowers must also make sure they pay back the entire amount of the loan within one year because there are no long-term terms with these loans. Hard money lenders tend to charge higher interest rates on shorter term loans.
However, since this type of loan is secured against an asset like real estate, investors will consider giving more favorable rates than banks would give on unsecured personal loans. So if your credit score isn’t great or if you don’t have time to wait for approval from a bank before beginning a project, then hard money might be an option worth considering.
How do hard money loans work?
To receive a hard money loan, an individual needs to find a lender who is willing to provide funding for the proposed project. Unlike other types of loans, these lenders typically don’t care about an applicant’s credit history or collateral. The borrower provides the property as collateral in the event that he or she defaults on the loan. Hard money lenders charge higher interest rates than traditional banks, with terms ranging from 6 months to 3 years.
What are the benefits of hard money loans?
A hard money loan is a short-term loan with very flexible terms, which typically range from one to three years. The benefits of a hard money loan include:
- The ability to get funds quickly in order to complete the deal.
- The property does not need to be sold before the hard money lender agrees to fund the purchase.
- No equity or credit history is required for approval.
- A hard money loan could be an excellent solution for those who want cash fast and don’t want their credit score or equity risk being taken into consideration in the process.
Final Thoughts
Capital Funding Financial is the number one Hard Money Lender Boston. We provide hard money loans to investors in Boston, Massachusetts. We’re the right people to contact if you need a loan for your business. We have helped many businesses get the funding they need. We specialize in bridge financing that is fast, efficient, and flexible to meet our borrowers’ needs.
