Hard Money – A Boon in Disguise

It is really hard to believe that you have not heard about hard money, especially when you are a real estate investor. Most probably, you have stepped into this business recently. In reality, it is a sort of loan provided by the private lenders and not by the traditional lending institutions. Hard money loan is easily available as it is granted on the basis of the collateral value contrary to the conventional criteria including impressive credit score, income statements, tax refunds and other necessary documents.

Though no hassle and lengthy processing are involved, still hard money loan is not a favorite with all and sundry in this arena. The reason is that this loan is attached with significantly higher volume of interest. This factor has imprinted almost an indelible and unfavorable impression on the investors that the hard money loan is hard to pay off. But the established business personnel know that such loan is really a boon in disguise. Why do they believe so?

First of all, it is hard to secure loan from the banking institutions within a very short time frame. Due to the official red tapes, it will take you several months to get the loan. On the other hand, hard money lenders will take a few days for appraisal and title work. Numerous documents are not required by the lenders, only an appraisal and proof of clear title are enough for them. Nowadays, some quasi hard money lenders check the credit status and income data of the borrowers.

This loan is granted against any type of collateral. Such a facility is absent in most of the cases. Versatility is a facet that has added to the popularity of this loan. Hard money loan is cheap. Having heard this, you may pucker your eyebrows, but it is true in spite of heavy volume of interest.