Have you ever heard of hard money loans and wondered what they are all about? These are loans that are taken by real estate investors to finance their property acquisition processes. Unlike the other loans that you get from banks and other financial companies, these do not require you to provide anything other than property as collateral. It is the attachment to property that the name hard money was coined. You may not know much about this if you have never been involved in real estate. To help you understand more about Louisville Hard Money Loans, check out the facts explained below.
The property you can offer
When submitting your application, the company will ask you to provide a property that will be used as collateral. You need to know that they will be coming to verify the existence and ownership of the property. Therefore, the first thing is to ensure that there are no disputes related to that property. Sometimes, there may be a court case on the property meaning that its future is not certain and so, it will not be accepted. You should also check the property value so that it matches with the amount of loan you are requesting.
People who qualify for these loans
As long as you are a real estate investor and you have the property that you can attach as collateral, you are good to go. However, you need to understand that it is not an automatic approval. Each company has their unique way of determining who gets loans and so, you should check their terms and conditions. It is not surprising to be turned down by one company only to be quickly accepted by the other. It is because they have different methods of evaluating their customers and so, you have to find where your right fit is.
How these loans help real estate investors
Louisville hard money loans would not be so popular if they were not helpful to the investors. These loans have been used to grow firms from scratch. A good situation is when you are bidding for some property, but you do not have the cash to pay for it. You know that you can resell it at a higher amount, but you are short of money. When such a situation occurs, you can use one of the other properties that you own to secure a loan. Once you by, you can remodel and sell it at a higher price, pay your credit, and keep your profits.
How these loans are processed
The processing of these loans is entirely different from what happens with the other types. To start with, it is a relatively short process. You will be surprised to find out that the lender is only interested in knowing a little information about you. The only thing that may delay the approval is the assessment of your property. Once this is done, your loan will be approved, and you will have it in a few days. This is amazing especially when you remember that there are people who apply for mortgages and wait for several months before getting a response.
Why they are better than traditional loans
The speed at which these loans are processed is the most important thing that puts them ahead of any other borrowing option. If you consider the urgency of money when it comes to this industry, you will agree that investors have no time to keep waiting especially when they are not even sure that the loan will be approved. In addition to that, people like it because of its simplistic nature. It feels like borrowing from a friend because the loans are short term meaning that you will have to settle them in under 24 months.
To be sure of getting the best Louisville hard money loans, you have to search for those that have been helping real estate investors for long. These are the companies that can guarantee good relations so that at the end of the day, both parties are happy. You should talk to them about their interest rates because it will help you to know how much money you will pay at the end of the deal. In addition to that, you may want to know if the payment period is flexible or fixed to their terms.