April 09, 2013

Hard Money Lenders: An alternative source for borrower

When applying for loans from banks, there are some standards that you must conform to and this makes it pretty hard for most loan applicants to qualify for bank loans. This has with time forced a huge number of loan applicants to search for alternative sources of funding and among these is hard money bad credit loans lenders. In most cases, such lenders provide short term loans and borrowing from them will therefore work great for small to medium financial need.

Do lenders require collateral on hard money loans?

The answer to the above question is yes and most lenders go for real estate investments as security. Before you get the amount of cash that you are applying for, the hard money lender you choose to apply with will first weigh the value of your real estate and then decide whether this is enough security depending on the amount that you are applying for. However, there are some lenders who will offer you financing collateral free when applying for some little amount.

One common characteristic with hard money lenders is that their standards do not follow traditional lending guidelines. This means that these lenders may not verify that you have a stable income or check your credit history and your qualification will therefore stand chances of going through even if you have a poor credit score or no credit at all. You will also find some of these lenders extending their services even to the unemployed.

Comparison shopping for the best deal

Owing to the favors extended in hard money lending, the lenders usually allow some very high interest rates and their loans are therefore pretty expensive. However, you can utilize the fact that these lenders are now available in numbers to get into the most competitive deal. This should take you only a couple of minutes if you have internet access since there are comparison websites on hard money lenders that you can use. You can then choose a lender who allows you:

• Relatively lower rates to reduce your overall repayments
• Flexible terms and conditions so that you will have it easy all through
• Convenient repayment period to settle your debt with ease

Some examples of hard money loans are mortgage refinancing, equity loans and bridge loans among others. Refinancing can help you pay off a number of loans that are secured to the property in question and this can help you to lower the amount you settle in a given month making it possible for you to regain control of your debts. You can use bridge unsecured personal loans to get some cash from an existing home without selling it and use the amount to buy a new home.

It is easier to obtain financing from hard money lenders since their requirements are easier but remember that these will cost you more since they carry higher interest rates. It is therefore important to carefully weigh your options and consider applying with such lenders when really necessary. You should also make repayments promptly to avoid losing your property.

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