The Major Benefits That Come With The Hard Money Loans
When you are a real estate investor, there are times when you will need quick cash, and at such times seeking bank loans might not be the best option, unlike the lending institutions which might take longer to approve your loan. Hard money loans refer to the funding that is done by the private money lenders California, and when out to seek financing, one will never be short of options. Before you can seek a loan from a given private money lender, there is the need to check their reputation as well as the reputation of their business, and make sure that they can be trusted to provide you cash for your real estate investment. Here are reasons for one to make use of hard money loans.
The number one reason why the hard money loans are the best option when one is out to seek finance for their real estate investment is the fact that it doesn’t take long to have the loans approved, unlike in the case of loans, since one can have their loan approved within a day or two after providing the lender the needed documents. When looking to secure such a loan, the lender checks if the property has a good market value and also determines if the borrower equity is at 20% or above. Unlike in the case of normal loans which take a month or even more, hard money loans provides you the case within a week, and one needs to inquire when the private money lenders provide the cash when seeking financing.
Another benefit that comes with the California hard money loans is that they provide one the option to repay the loan flexibly. One can discuss with the loan provider to provide them a loan repayment plan that will be structured to suit them, but in the case of banks, one will not have been afforded such freedom. In the case of banks, one will have to stick to the payment plan developed by the bank, but in the case of private lenders, one will have a customized repayment schedule.
One will also not incur any prepayment penalties when they seek loans from the private money lenders. The hard money loans can be repaid even before the maturation date without one incurring a penalty. One is afforded the opportunity to find cash and repay the loan without incurring a penalty.
One of the major worries, when one is seeking to have a loan, is their credit history or credit score, but in the case of hard loans, your credit history attracts less emphasis. Loan approval is dependent on the value of the property rather than credit rating.