Does Your Credit Score Affect Approval for a Hard Money Loan

Does Your Credit Score Affect Approval for a Hard Money Loan?

Published On: June 23rd, 2017Last Updated: June 23rd, 2017Categories: Hard MoneyTags: , , ,

Many investors use hard money lenders to help fund real estate investments they plan to sell right away. Hard money lenders offer a substantial advantage over traditional banks because of their ability to fund loans at a faster rate. The approval requirements are far less stringent, and in many cases, credit scores do not affect an investor’s ability to qualify for a hard money loan.

Value of the Subject Property

Most hard money lenders require borrowers to use the subject property as collateral for loan approval. The value of the subject property is more important to lenders than the borrower’s credit score. If a real estate investment makes sense, lenders will look more at the property than credit scores.

Interest Rates and Fees

Although credit scores play a small role in loan approval, hard money lenders do charge higher interest rates and fees for borrowers with less than stellar credit. However, the amount of equity in the subject property is the primary factor for approval, so borrowers with poor credit, including foreclosures and defaults, qualify if they can prove the “after repair value” is worth far more than the purchase price.

Property Plans

Real estate investors with poor credit should outline a detailed plan for the property before applying for hard money loans. The outline must include how borrowers plan to pay off the loan. The information should also include how investors plan to restore the property’s value and how they plan to market the property for immediate sale.

Do You Need a Hard Money Loan to Buy an Investment Property in Atlanta?

If you’re looking for a hard money loan in Atlanta, we may be able to help you.

Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value.

Read our frequently asked questions and take a few minutes to learn about the hard money loan process.