A Beginner’s Guide to Hard Money
If you have seen commercials and movies, you may be familiar with the term “hard money”. Another popular term is “cold, hard cash”. But what exactly is hard money? This guide will help you understand what hard money loans are, how they can help you, and how to become qualified for one.
What is Hard Money?
In essence, hard money is a short-term loan. The hard money loan is often secured by real estate, and offered by private investors rather than banks. Hard money loans are very short, typically running 12 months. You must commit to monthly payments including interest in order to qualify for a hard money loan.
What are Hard Money Loans Used For?
Hard money loans are great for some real estate investments. In short, here are a few of the things you should use your hard money loans for:
• Real estate flips
• Land loans
• Home fixes
• Solving credit issues for a buyer
• A quick-acting real estate plan with a timed deadline
What are the Requirements for a Hard Money Loan?
A hard money loan prioritizes, first and foremost, the amount of equity the borrower has in whatever property they need a loan for. If you don’t have a stellar credit rating, you don’t need to worry – it’s all about the equity.
As long as you have enough capital to pay the loan’s interest, the private investor typically won’t care if you have dealt with financial issues in the past, such as a short sale or foreclosure on a home.
One thing the lender will consider, however, is what you are going to use the hard money loan for. Do you want to flip a home? Do you have a well-thought-out plan to present to the lender? This can increase your chances of being approved for a hard money loan.
Find a Hard Money Lender at Wexum Today!
At Wexum, we can help you get qualified for a hard money loan. Contact us today for a free quote and more information!
