Hard Money

Applying for and obtaining a mortgage can be an incredibly time-consuming task. With so many forms to fill out and different steps to the approval process, the mortgage process can often cause buyers to miss out on homes that they’re interested in buying. To make matters worse, some borrowers may find the mortgage process fruitless, as lenders reserve the right to deny mortgage applications for any number of reasons.

Fortunately, traditional mortgages aren’t the only option for people who are ready to buy a home. Hard money loans rely on a completely different process, making home buying possible for people who don’t have time to waste with a lengthy mortgage process or who may not qualify for traditional mortgages.

What is a Hard Money Loan?

A hard money loan is a type of mortgage that a borrower secures through the use of collateral. As long as you have assets that the lender will accept as a means of securing the loan, you’re eligible for a hard money loan. 

Benefits of a Hard Money Loan

Traditional mortgages require a lot of paperwork. In most cases, you will be required to provide bank statements, pay stubs, tax records and other information that highlights your ability to repay a mortgage. Not only does compiling this information take time, but there’s also no guarantee that the mortgage lender will approve your loan application.

Not only are hard money loans faster and easier to obtain, but the requirements for them are much lower. Mortgage lenders often require you to prove that you’ve worked for the same employer for at least 24 months and have hefty credit score requirements. Conversely, hard money loans focus more on your current assets that can be used as collateral to secure the loan. These lower requirements make homeownership possible for a larger group of potential buyers.

Who Needs a Hard Money Loan?

Still unsure if a hard money loan is right for you? Understanding who can benefit from a hard money loan can give you a better idea of whether or not this option is right for you.

Buyers Who Need to Act Quickly

Whether you’re looking for a new home to live in or you’re an investor who needs to act quickly to close a deal, hard money loans are a great tool because of how quickly you can obtain them. If you’re purchasing in a competitive market where people are throwing cash offers at buyers, hard money loans can help get you ahead of the game.

Your Credit Score Isn’t Ideal

All of us have made financial decisions that we regret. If your missteps have left you with a sub-optimal credit score, hard money loans are a great option since they focus more on collateral. 

You’ve Changed Jobs Recently

Most mortgages require you to prove that you’ve been with the same employer for anywhere between six and 24 months. If you’ve recently changed jobs, a hard money loan is a great alternative. 

These certainly aren’t the only people who can benefit from hard money loans. If you think these loans could be a good option for you, contact us for more information