In some cases, investors and developers are better off taking out a hard money loan than using a traditional loan.
So when is a hard money loan better for developers and investors?
Typically, hard money is a better choice when an investor or developer:
- Needs to close quickly and following traditional funding routes would take too long. Often, banks and other traditional lenders take several weeks – if not longer – to process the paperwork on a loan.
- Has several good opportunities but not enough cash to accept them all. Banks won’t extend credit if it appears you’ll become over-extended.
- Wants to take advantage of an opportunity without the financial strength banks require. While your credit scores and financial history are important with a hard money loan, they carry far more weight with a conventional loan – and that can make it difficult to obtain financing in many cases.
- Has credit through a lender, but the credit isn’t sufficient for the investment.
Credit and Hard Money
Although credit is important when you’re interested in borrowing hard money, usually the collateral is more important than a borrower’s credit history. Because these types of loans, which can be for up to 65 percent of the collateral’s after-repair value, or ARV, are typically short-term and designed for investment purposes, they’re often the way to success for investors and developers.
Are You Looking for a Hard Money Loan in Atlanta?
If you’re interested in obtaining a hard money loan in Atlanta or its suburbs, we can help.