When you want to invest but you don’t have the money then you have tons of different loans to choose from. Each has its own benefits, pros and cons. It now depends to you on how you’ll weight these factors in able to choose the very best. Nevertheless, one of the top loans now especially in Las Vegas isn’t from banks and mortgages anymore but through a hard money loan.
What is a hard money loan?
A hard money loan is also called Private money loan. One of the most common differences is that these loans are not funded by the bank but from private investments of individuals or corporations. What makes it special is that the borrower can still have a very large equity even after the loan is made and granted. Also, compared to normal loans, hard money loans are faster and way more efficient when it comes to approval of the loan up to the cash release. Some hard money loans can be granted and received as short and 4 days.
How much is the interest rate?
Hard money loans usually come with higher interest rates of 10% to 12 % compared to normal loans. The loans are payable as well in a shorter period of time of between 6 and 36 months.
Who are Hard Money Loans Borrowers?
When it comes to hard money loans or the private money loans, we have two kinds of borrowers namely:
Real Estate Owner occupants: These people are in the smaller group of borrowers who prefer private financing to fund their Las Vegas residence or property. These people usually have low credit scores hence they find it a bit more difficult to apply for normal loans and they better try Private money as an alternative while they are still restoring their creditworthiness. This group of borrowers usually prefer these short-term loans with higher interest rate just to fill the gaps until they can already qualify for bank financing.
Las Vegas Real Estate Investors: These investors are the major borrowers of Private money loans. They are the ones investing in good real estate projects hence they need fast money and that’s where hard money loans come to the picture. They usually dodge the idea of lengthy processes in bank financing especially because once they see a property that’s worth investing, they need money right away before anyone else gets it.
Can you invest in Hard money loans?
Absolutely yes! We have mentioned awhile ago that private money loans are financed not by bank but by private individuals, companies or corporations. Thus, if you are interested not in borrowing money but in investing in these loans then you can always do so.