Loans are rather helpful and dangerous at the same time. It helps if you know how and where to get the right one and it’s dangerous, if you will not be able to pay it on time because the interests will eat you up. These days, people have been talking about this kind of loan which was said to help a lot of people in need of fast and reliable money. It’s the Hard Money loan. Nevertheless, how sure we can be that it is not another form of loan that kills rather than helps. Here are some of the essentials a Hard Money borrower should be aware about.
First is that a Hard Money loans are loans funded quickly. There is a good 72 hours for having all the documents and the money is yours. This is another collateralized loan on single family residential homes or other Real properties. They are giving borrowers the money to purchase an investment and this will be the collateral. Like any other loans, they provide a good 70% loan of the total cost of the property which of course, includes the repairs if possible. Nevertheless, don’t be confused on how they run the money. They will loan you the money that you will need in repairing a particular property and the money should be turned around to them quickly, let’s say after the repairs. Thus, the quick approval and quick pay out.
It is not a loan if it doesn’t come with interest and Hard Money loans for that matter have an interest of 10-18%, depending on the lender. You can choose your own payment system but the monthly payment is the most common. Lenders can give you 3-12 months to settle your loan and as usual, the longer the term, the higher cost and interest rate to pay off.
What made Hard money loans better than the other loans is because they don’t look too much after the credit scores of a borrower. So if you’re too conscious about your credit score then don’t be. They are more after the collateral so as long as your proposed investment property is of good value then you’re in.
If you are in need of fast money to invest into something obtainable then be friend with your Hard Money Lender. However, do this after being sure that you can pay and you can handle the responsibility. A loan no matter how small or big it is, is still a loan.