Traditional loans are not always easy to get approved for, especially if you do not have good credit. When you need a quick approval for a loan or when other lenders will not approve, hard money is a suitable option. Here are the advantages of hard money lenders.
Hard Money Lenders Are Different from Traditional Banks
Hard money lenders in Los Angeles, CA lend based on collateral that secures the loan and they are not as concerned about your ability to pay. If anything happens that causes you to be unable to repay, then the hard money lender recoups their money back by taking the collateral and selling it. Hard money loans are short-term loans that typically last from one to five years.
Reasons to Use Hard Money
Hard money contracts are more flexible than traditional loan contracts. The lenders do not use a standardized underwriting process. They assess each deal individually and depending on your circumstances, you may be able to modify things such as repayment schedules.
The most critical factor for hard money lenders near Los Angeles, CA is collateral. They are not concerned about foreclosures or other negative information on your credit report. In some cases, lenders may not even look at your credit report. If you’re purchasing an investment property, the lender is willing to lend as much as the property is worth. A majority of hard money lenders keep low loan-to-value ratios.
Since the lenders are mostly interested in collateral as opposed to your financial position, hard money loans are closed in a faster time frame than traditional loans. Once you have established a relationship with a lender, the process moves quickly which enables you to close deals that others cannot.
Reinvest Equity from an Existing Property into a New Property:
When there’s an opportunity for a real estate investment, you are left with a limited amount of time to act. There are cash-out refinance loans available from hard money lenders if you have an ample amount of equity on your property. Direct hard money lenders are able to process a cash-out refinance loan and your funds are available in about one week.
How to Find Hard Money Lenders
In order to borrow money, you must get connected with hard money lenders in Los Angeles, CA. You will need to figure out who in your area lends money based on collateral. Real estate investor groups and real estate agents are great sources to go to. You should reach out to a few lenders, develop a relationship, and explain your needs so that you can get your projects funded in a quick and easy manner.