Hard money loans are short-term loans secured by an underlying property or home. Hard money lenders do not operate under the same restrictions and regulations that govern more traditional bank loans. As a result, hard money lenders can offer attractive financing to borrowers who may not otherwise have been able to fund their projects through traditional bank loans.
What makes hard money loans appealing to real estate investors?
- Speed: traditional loans from traditional financing institutions can take weeks or months to close. Moreover, the process of obtaining approval for a bank loan can be long, frustrating and inefficient. These inefficiencies simply won’t cut it for real estate investors, who often need funds quickly to close on attractive investment opportunities and to compete with cash buyers for sought after deals.
- Flexibility: hard money lenders aren’t governed by the same set of rigid rules and regulations that dictate bank lending decisions. Instead, hard money lenders can be flexible in evaluating each loan. This opens the door for a wider range of borrowers to be eligible to receive hard money loans.
These advantages are important for real estate investors to consider in the current lending climate. Banks are simply unable to lend to certain types of real estate properties, including distressed properties, properties that require fast closings, or specialty real estate deals. Investors looking for funding for these and other types of investment opportunities should consider looking to hard money lenders. Contact us today to learn more about our hard money lending programs and to see if YC Funding can be the right option for you.