Why A Hard Money Lender Might Be Right For Your Real Estate Purchase

Are you looking to buy a piece of real estate in the near future but you don't yet have the funds needed to do so? While traditional advice might say to apply for a mortgage, there are a variety of reasons why you might want to consider a different kind of loan. Hard money lenders specialize in funding real estate buyers who meet certain criteria. Here's why a hard money lender might be right for your next real estate purchase.

Not as Complicated as a Credit Check

When you apply for a loan from a hard money lender, the company giving you the money will hone in on specific criteria related to your real estate transaction. How much money you need for the down payment compared with how much money you have in the bank is a typical starting point. The lender will also want to see that you have enough capital to handle the monthly payments. Proving you have enough to establish equity and keep your head above water is usually enough to get the loan you need for your down payment. 

In other words, a hard money lender doesn't usually pull a full credit report. Things that might get you disqualified from a traditional lender, like a bankruptcy in recent years, won't affect you here. As long as you can prove you have the money in-hand to reduce your risk right now, you have a good chance of being approved.

Get the Money Quickly

Have you ever applied for a traditional bank loan before? If not, you might be surprised to learn how long the process can take. It might take a bank a couple of weeks or longer to go through your application and financial history. They'll be combing through everything in detail to ensure you are a good candidate. Because a hard money lender looks at fewer things in your past as was just described, it's possible to get the money quickly. You might even be able to get the money the same day you apply if your current financials seem adequate.

Perfect for Flippers

Traditional mortgage lenders offer 20- or 30-year mortgages with the intent to make money over time from the buyer. For this reason, a traditional lender might be less likely to approve a loan application if it's clear you are going to try and flip the house shortly after buying it. Hard money lenders don't care what you do with the house after you get it, as long as their initial loan is paid back plus any interest or fees that were agreed to. Hard money lenders can help you where a traditional mortgage company will not