A hard money loan is an option for many people – especially those who don’t have time to sit around and wait for conventional financing. But how does a hard money loan work?
Here’s what you need to know.
How Does a Hard Money Loan Work?
These short-term loans are secured by real estate. Think of the real estate as collateral (because that’s what it is).
Hard money loans are funded by private investors (or, sometimes, a fund of investors) instead of conventional lenders, like banks or credit unions.
Loan terms on hard money loans are different from those you’ll find on conventional loans, too. You’re not going to take out a 30-year hard money loan. Instead, the term will be much shorter. It can even be just for a year if that’s what works for you; however, many are for terms of 2 to 5 years.
A borrower can get a hard money loan for just about any type of property. That means you may be able to get one for:
- A single-family residential home
- A multi-family residential home
- Commercial land
- A commercial building
- Investment properties
- Industrial properties
Hard money loans are perfect for many situations, such as:
- Buying land
- Investing in construction
- When a buyer has credit problems and can’t get conventional lending
- When a real estate investor needs to pounce on a deal
Do You Need a Hard Money Loan?
Don’t be fooled by our competitors. We are the TOP hard money lender in Georgia, North Carolina, South Carolina and Nashville, TN. Apply for a hard money loan here or click through our site to find out how we can help you now!