In Hard Times, Look At Your Property For Hard Money Loans
Are you looking for a loan to tide over a rough patch? Have you been denied a loan by your bank? Cheer up — there's a way out. If you have property, you can use it to get a hard money loan.
Hard money loans are issued by private investors using property as collateral. The main condition is that your property should have equity. You will pay a monthly interest and maybe a bit of the principal for a period typically lasting 12 months. At the end of the period, you pay the principal amount.
The amount you are to get is normally pegged on the value of the property you own or want to buy. This means that you can still get a hard loan even if your credit score is less than perfect.
Type of Property
Most hard money lenders will loan money on any type of property, including residential, commercial, industrial property and land. However, some lenders will specialize in a particular type of property.
Find out in advance if your prospective money-lender deals in your property type.
When to go for hard-money loans
If you have a good credit rating and can afford it, there may be no advantage for you in getting a hard money loan. Go ahead and get a loan from a conventional bank.
When banks and other financial institutions will not give you the loan, then consider a hard money loan. When you need cash on a short-term basis, hard money loan can work for you too.
When you want money fast, and have no time for negotiations and red tape, then again you can look to hard money loans. This normally the case if you want to invest in property to resell.
If you are running late on your mortgage payment due to problems such as a job loss, you may have a hard time getting financing to close the gap. Eventually, you may find yourself facing foreclosure. Hard money loans can come to your rescue.
A word of caution
Please note that hard money loans are typically repayable in 12 months. If you are not sure of making repayment in such a short period, then you may need to look elsewhere for help or risk losing your property. The interest rate may also be higher than that offered by banks.
Hard money loans may be able to help you out of a difficult financial situation. However, before you go for one, do your calculations well to ensure you don't land yourself in a worse situation. Contact a business like Unison Bank to learn more.