What is a hard money lender? The term can cause visions of unfair types that will cut your finger on your fingers if you damage the loans. But you can be sure – these professionals are not robbers. In fact, these lenders fill a legitimate niche in the housing market for quick housing loans.
What is a hard money lender?
In order to understand “what is a hard money lender”, it is important to know what a difficult loan is: it is simply a short-term loan secured by real estate.
Let’s return to the question of who is and what the lender claims: This is a synonym for a private investor. The lender can be an individual, a group of investors or an authorized broker who uses his own funds. This is hard money from the bank that uses money from its savers.
He’s using a hard-money loan
Why should every house buyer decide on a loan from a hard money lender, not a mortgage in a traditional way from a bank? Because loans with hard money are mostly painful. The other side? The rates of large cash loans are much higher, and you lend money only for a short time.
Hard money lending is especially popular for the following people:
Flights: If the house is in a bad condition and seems to be fixed and reversed in a few months, most people no longer want to go through the hassle when they take a 15 year loan.
Builders: Many contractors use cash loans to buy a lot, build on it, then sell a new structure and quickly repay the loan.
Investors: Occasionally, a real estate investor will face the killing of assets that must be filled immediately. If the investor has no money in hand, the loan can be quickly monitored by a lender difficult to pay, which is, in fact, an investor in real estate.
People with credit problems: People who have cash for advances, but the bank has rejected them because of a conventional loan – or have had an illegal, unfinished or other red flag on their recent credit report, but they have some money to use large hard money loans. to buy property that would otherwise be inaccessible to them.