Do you need hard money fast? You may not be aware of it, but hard money loans are an excellent option for people who need to borrow money and want to do so quickly. Unlike traditional bank loans, hard money is backed by an asset rather than the borrower’s creditworthiness. This means that hard money lenders don’t need to run as many checks on a potential client before approving them for a loan – which usually translates into faster approval times. This blog post will discuss how fast hard money loans really are and what you should know before applying for one.
How Long Does a Traditional Loan Take?
A traditional bank loan can take up to six weeks from application to completion. That’s because banks need to gather your information, verify it, and underwrite the loan by hand. This process is lengthy due to the amount of labor and communication with different bank and tax organizations required.
Additionally, most banks and credit unions have high standards when it comes to loan approval. They expect someone who is traditionally employed (W-2 status), has good credit and credit history, and has a sizeable down payment for the property they want to purchase. A borrower may not always meet these requirements. Thus, they are denied their loan. With a competitive real estate market, a loan rejection will often result in losing out the opportunity to purchase the home the borrower is interested in.
Why Are Hard Money Loans Faster Than Bank Loans?
Most hard money lenders don’t need to do all the work to check the borrower’s credit because they are backed by the asset being purchased. Let’s say, for instance, that you have a good credit score and a job with a non-traditional income structure – which is what hard money loans specialize in. The hard money lender doesn’t need to run the credit checks a bank would. Instead, they’ll assess the value of the property you plan to purchase with the loan money. Then, they’ll use the property as collateral for the loan.
Why Use a Hard Money Loan?
It can be advantageous to use a hard money loan to purchase a property for business owners, entrepreneurs, and farmers who don’t receive a traditional income. Using a hard money loan also allows the borrower to repay when it’s more convenient for them (such as when they sell their crops or take their bonus), rather than the monthly repayment structure of a traditional mortgage.
Additionally, hard money lenders typically don’t require the borrower to have a perfect credit score or an extensive list of collateral. A poor credit score will follow someone around for a long time, seemingly dashing any hope of applying for a home loan. However, for those with a less-than-stellar credit score, hard money loans provide an opportunity to tap into funding for purchasing a home. The borrower can use hard money as the down payment for your house purchase or borrow it simultaneously with a traditional loan.
Need a Hard Money Loan Fast?
A hard money lender will typically approve your loan in a matter of days rather than weeks. With today’s hot real estate market, it is highly beneficial to secure funding quickly. Park Place Finance closes many loan applications in as few as seven days. If you’re looking for a hard money loan fast, contact us at Park Place Finance, and we’ll get your funding as soon as we can.