subject: Put an End to your Financing Problem with Hard Money Lending [print this page] Picture this scenario: you have finally snagged a lucrative real estate deal after tirelessly negotiating with a home seller. After sending pertinent documents to the title company, you are now ready to close the deal with the seller in a week. However, a huge medical emergency involving your son suddenly came up and you were forced to use the funds intended for the purchase of the property to pay for your son's hospital bills. You are considering asking the seller to postpone the closing and give you more time but you think such a move will mar your credibility and integrity as an investor. What should you do?
Although qualifying for a bank loan seems to be a plausible solution in this case, it wouldn't exactly do you any good since it usually takes a long time for a bank or traditional lending company to assess a loan application. And with banks stepping up their lending standards, qualifying for a traditional loan is more difficult than before. Therefore, your best bet in such a scenario is to try hard money lending.
Qualifying for a hard money loan is the best solution that you can think of when faced with such a dilemma. Because lenders of hard money uses a lending criteria that is remarkably different from the ones utilized by banks, mortgage companies, and credit unions, a borrower can enjoy several liberties that he doesn't normally enjoy when qualifying for a bank loan.
One of the perks of borrowing hard money is that a borrower can secure funding regardless of his credit rating. Hard money loans are primarily asset-based and hard money lenders reject or approve a loan application depending on the after repair value, or ARV, of the property for which the loan is being made. This means that as long as you're borrowing funds for a house that has a high ARV, you can get the money you need even if you have a poor credit score.
And what's best about hard money lending is that you can quickly get the funds you need. With this type of financing, extensive credit checks are not necessary. So even if you were given a week to close a deal, you can fulfill your promises to a home seller by obtaining a hard money loan.
Put an End to your Financing Problem with Hard Money Lending
By: Hanes Walter
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