There are some people, especially those in the real estate market that could answer the question, what is hard money, easily. But most probably do not have a clue or good understanding of what it is. In most cases, private individuals or small groups are the main lenders of hard money. One of the big differences with this is that the lenders really focus on the value of the property and not credit score or financial history.
One of the biggest things to keep in mind is that because hard money loans are not based on credit score or financial history, but are instead based on the actual value of the property that is being purchased, they are going to come with a much higher percentage rate compared to other mortgages. On top of higher interest rates, it isn’t uncommon to have also higher additional fees and to have a mortgage that could be twice as high as traditional mortgage prices.
The common question, what is hard money, isn’t the only question that lenders often hear. Many people also ask the question, who needs it? Since you can usually get approved to borrow up to 100% of the price of the property being purchased, then people who flip houses along with developers can really benefit from this. But, be prepared because you will usually have to prove real and valuable assets of the property as credit score doesn’t play a role in approval.
It is often the case that sometimes you can’t easily get approved for a standard loan. So, if you plan on buying a property that you know you will be able to turn into a big profit and quickly, then hard money might be the most beneficial option for you and your small business. It can also be used to fund projects to help raise the property value for the future and this is a smart way to go as well.
Of course, it can also come down to who you know and that can be very helpful during this process. If you know of a local lender that you can trust to ask the question what is hard money, then go for it. Speaking with someone you trust and know will give you a direct answer that you will understand will come in handy in the long run. Plus, having a trusting relationship along with great communication with anyone helping with your finances is always important!
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.