A hard money loan is a type of short-term, secured loan that is used to finance real estate investments. Hard money loans are typically offered by private lenders or investment groups, rather than banks. They are often used by real estate investors who need cash quickly to purchase or renovate properties.
Hard money loans are characterized by their high interest rates and short repayment terms. Interest rates on hard money loans can be as high as 15% or more, and repayment terms are typically 12 months or less. These loans are also typically secured by the property being purchased or renovated.
There are several reasons why someone might choose to get a hard money loan. One reason is that hard money loans can be approved quickly. The approval process for a hard money loan is typically much shorter than the approval process for a traditional mortgage. This can be helpful for investors who need cash quickly to close a real estate deal.
Another reason why someone might choose to get a hard money loan is that they may not qualify for a traditional mortgage. Hard money lenders are often more lenient than traditional lenders when it comes to credit scores and debt-to-income ratios. This can make hard money loans a viable option for investors who have less-than-perfect credit.
However, there are also some drawbacks to hard money loans. The high interest rates and short repayment terms can make these loans very expensive. Additionally, if the borrower defaults on a hard money loan, the lender may be able to take possession of the property.
Overall, hard money loans can be a good option for investors who need cash quickly and who may not qualify for a traditional mortgage. However, it is important to be aware of the high interest rates and short repayment terms associated with these loans before taking one out.
Here are some of the pros and cons of hard money loans:
Pros:
- Quick approval process
- More lenient lending standards
- Can be used to purchase or renovate properties
Cons:
- High interest rates
- Short repayment terms
- Risk of foreclosure if the borrower defaults
If you are considering a hard money loan, it is important to weigh the pros and cons carefully before making a decision. You should also make sure that you understand the terms of the loan and the risks involved.
Phoenix Hard Money Real Estate Loans
If you’re interested in getting involved with real estate investing and need the capital to purchase properties hard money is a great way to get started. Brad Loans has extensive experience in both real estate investing and hard money lending and is proud to offer Phoenix Valley real estate investors the financing they need. It is easy to get started applying for hard money loan and Brad Loans is able to work with clients with bad credit and no credit. We are your source for hard money when traditional banks say no. Read more about Brad Loan’s hard money loan programs or get started fill out our hard money loan application or give us a call to ask questions at 480-948-0880.
