Advantages of Hard Money Lending in Real Estate
A hard money loan is a term used to describe a loan made by a private investor that closes quickly, doesn’t require a good credit score/history and is short-term. In lending, a hard money loan in Fort Lauderdale is one in which the value of the property is taken as collateral. Loan of this type has a higher interest rate as compared to normal loans, mortgage lenders, or traditional funding channels. This is due to the higher risk that hard money lenders take on. Hard money lending in real estate has many benefits, some of which we will discuss below:
- Makes Investor’s Offer Strong
Hard money loans in Fort Lauderdale stands out from other traditional loan systems because it helps make an investor’s offer strong. This system is especially useful in situations where many offers are present backed by bank loan financing. Hard money lenders in Fort Lauderdale have the edge over bank loans because banks can pull the financial plug anytime for whatever reasons. Hard money in these situations proves to be a more reliable option than conventional loan systems. Hard money loans are able to close very quickly, usually within a week, due to not as strict underwriting procedures.
- Easy Approvals
Approval for a hard money loan is rather quick as compared to any other traditional loan for which you have to wait for weeks. Hard money lenders in Florida have an easy time making approvals and starting a stream as they have more concern with collateral rather than a credit score. Hard money loan in Fort Lauderdale is based on the value of your asset as long as it is worth more than the actual loan plus the interest. Hard money loan typically saves your time and frustration, making it a great option, especially if there is an urgent need.
The agreements of hard money are more flexible than traditional loan systems as hard money lenders in Fort Lauderdale, Florida, do not typically use an underwriting process. Instead, they evaluate each application individually and, based on the situations, can make necessary changes or amends in things like repayment schedules. In this way, you will borrow a sum from an individual rather than a corporation with strict policies.
- Available for Almost Every Project
Hard money lenders in Fort Lauderdale, Florida, can finance your projects of real estate that many traditional lenders may not show interest in financing. This financing option acts as a short term loan where investors can buy a property, make necessary repairs, and sell it quickly. There might be issues that prevent a traditional loan system from approving the application like plumbing, electrical, or any other problem. Hard money loans in Fort Lauderdale can help the borrower for such properties that do not qualify for a traditional loan. The borrower can make necessary repairs with the loan they have gathered and refinance with the bank.