When you need money right away, going to a bank for a loan may not be the most ideal solution because their approval process may take up to a month and sometimes even longer.
If you really need funds for something right away, private hard money lenders in Florida can help you get the money in less than a week.
What is a hard money loan?
A hard money loan is a type of loan that you can get outside of credit unions or traditional banks as it is funded by private investors. The qualifications are also not as strict either since hard money lenders do not scrutinize the borrower’s credit history.
Also referred to as an equity-based loan, a hard money loan looks at the value of the asset and not the creditworthiness of the borrower. Additionally, it is a short-term loan that may last from one to five years.
Why do people get a hard money loan?
Hard money usually comes with a higher interest rate than traditional loans. So, why do people still use it? Well, hard money is very easy to come by. You also don’t need to have a stellar credit history to get approval, so people who can’t qualify for a traditional loan turn to this.
Likewise, homeowners who are facing foreclosure may also get a hard money loan as long as they have substantial equity in their house. Property flippers also find this especially useful because they need to have access to funds right away when bidding for a property.
A hard money loan is not usually the first type of loan people turn to when they need money because of its high interest rates.
However, people who are pressed for time — the ones facing foreclosure and those who cannot qualify for a bank loan, for instance — would often turn to this in order to get funds. It has its pros and cons which you must closely look into if you are considering getting a hard money loan.