Sometimes, a conventional bank fails to meet all our financial needs due to a few reasons. Some of the common reasons could be the credit history is not in the best shape or an ongoing loan through the regular bank. In that case, hard money loans can be the best choice for the borrowers. In Fact, in commercial real estate circles and investment market, the discussion about the great benefits of hard money loans is commonplace.
When it comes to general borrowers and new investors, there is a lot of confusion surrounding just how beneficial hard money loans are. The term “hard money loans” often, is considered as a scary monster by many, however, the case is different hard money is neither a monster or scary. Well, it proves to be a best friend of many borrowers accessing the funds they are in need. For some people, a lack of insight and understanding of this beneficial financing method has led to many myths and misconceptions around hard money.
Despite many untrue beliefs floating around, below listed are three biggest myths about hard money loans that simply are false.
- HARD MONEY LOANS ARE NOT EASY TO GET
This is false. With the right property, you can obtain the hard money loans quite easily. This is because unlike the tradition bank agreement, hard money loans pay more attention to an investment opportunity for a borrower, rather than a conventional bank account and credit history. Hard money lenders tend to overlook the past issues than a traditional bank or an institutional bank. That clearly means that many times, hard money loans proves to be the easiest and best way to finance a purchase.
- REPUTABLE HARD MONEY LENDERS ARE DIFFICULT TO GET
This is one of the biggest myths to dispel. A reputable and trusted hard money lender can be easily found about anywhere with the help of a little research and time. Sure, there are many lenders available that are not reputable and trustworthy, but little efforts and search in the right places will take you the reputable hard money lenders. Real estate agencies in your area are one the best places to start with your search.
- HARD MONEY LENDERS DO NOT CARE ABOUT BORROWERS
Just for the reason, hard money loans are prepared according to the fast- sell value of the properties, claims have been made by many that borrowers are not important for the hard money lenders they care less whether or not an investor is able to make the payments. The reason for this is, foreclosing on the collateral property frequently offers profits for the hard money lenders than the loan itself.
So, as you can see hard money loans can be a lifesaver for the new investor or borrowers with no other options. It’s very important for every borrower or investor to be aware of the truth about hard money loans.