Hard Money loan is the term that has used to describe a loan made on the raw equity of real property. In other words, hard money loans are made with the assumption that the liquidation of the property will be the primary means of loan repayment in the event of default. Hard money loans can be a great way to finance a real estate investment but the loan application process can be quite difficult from traditional bank loans. Many potential hard money borrowers are not prepared to apply for a loan. Don't be one of the unprepared borrowers.
There are different steps for how to get a hard money loan approval. The borrower must understand the steps. The first is finding the right project. A property valued in the right range may not be in a suitable neighborhood. Hard money lenders want to know that the property and the location are a safe investment. Other is to have the property documents ready. Hard money loans are primarily secured with the property but knowing about the borrower is important. You may be asked about credit, income and assets.
The third step is do the proper research before applying for loan. The borrower should know the area they want to invest in and should have pictures of comparable properties. Other is to have an exit plan. i.e. Hard money loans are typically short term and usually are 1-2 years in length. The lender wants to know that the borrower has a plan for either selling or refinancing the property before the term is up. Knowing how you plan to repay the loan is a key factor in a hard money lenders decision.
If the borrower brings a estimate from a contractor showing what repairs are needed and the costs involved, they are much more likely to be considered for a loan. So you should talk to the contractor for better help. The last step is to perform. Hard money lenders want to see that you're interested in this loan. Return calls promptly and get the information they need in a timely manner. Hard money lenders keep less capital on hand than banks. If you delay in getting back to a hard money lender, they may lend their assets to another borrower.
If you want to know more about Hard Money Loans or interested to get loans, do contact us at:http://www.equitycoalition.com/contact/