If you’re interested in real estate investing, you’re likely going to come to a time when you need a loan. What type of loan you should get depends on several factors, including your goals and timeframe. One type of loan that may interest you is a hard money loan. What is a hard money loan, you might ask? Hard money loans, provided by hard money lenders in Texas, are a great solution in some situations. Below, we outline hard money loans and what makes them different from other loans, who might want a hard money loan, and some of the benefits it can provide them.
Defining a Hard Money Loan
A hard money loan is a type of loan in which the borrower secures the loan using real property rather than their creditworthiness. This means that the hard money lender looks at the property you are using as collateral to determine what sort of loan you are eligible for rather than your personal financial and credit history. Hard money loans typically last between 1 and 3 years, with the primary purpose being to supply to borrow with quick money.
Who Might Use a Hard Money Loan?
There are a few types of people who might be interested in getting a hard money loan. The first is people interested in flipping homes. When you flip houses, your goal is to purchase a home, renovate it, then sell it at a higher price to turn a profit. However, renovations cost money in supplies, tools, and labor, which is where a loan comes in. Using the property as collateral, the borrower takes out hard money to pay for the renovations, then pays the loan back once they sell the home for a profit.
Another scenario is someone who is looking to buy a new home. If you want to buy a new home in Texas but have not sold your current residence yet, you could use a hard money loan to pay for the new house. You can use your existing home as collateral, then once it sells, pay back the loan. Essentially, hard money loans are a good consideration for anyone who has collateral and needs funds over a short period of time.
Benefits of a Hard Money Loan
There are a few benefits to choosing a hard money loan over more traditional loan sources like banks. The primary benefit is the speed at which you can receive your loan. In most cases, hard money lenders can review your loan application and deliver your funds in a much shorter time period than banks. This is because the hard money lender does not need to spend time reviewing your financial situation. Instead, they look at the collateral you are providing.
For people interested in flipping homes, speed is essential. You need to renovate the house and sell it as quickly as possible to maximize your profit. If you wait too long to receive your loan, this delays the renovation process and reduces your potential profit. This is why many home flippers in the Texas area choose to go with a hard money loan.
Since hard money lenders only look at collateral, this also makes it a good option for those people with less solid credit histories. If you have a lower credit score or have not built up much of a credit history yet, you may have a better chance of securing a hard money loan than a traditional loan from a bank. Between accessibility and speed, hard money loans provide some great benefits to new and established real estate investors alike.
Getting Started with a Hard Money Loan in Texas
If you’re in the Texas area, it’s easy to get started with a hard money loan. Quick Lending is a provider of hard money loans in the Texas area. We make it easy to secure the loan you need. Then, once approved, you’ll have the funds you need in practically no time at all.
To get started, contact us today. Once you do, we’ll set up a meeting with one of our loan officers. This loan officer will then discuss your goals with you and present you with your loan options. After settling on the type of loan you want, you can submit your application, which the loan officer can assist you with. From there, we’ll quickly review your loan application and, if approved, send out your funds.
The entire process is smooth and quick, as we know how important it is that you get your funds in a short period of time. Don’t settle for getting a loan from one of the banks in Texas, which could potentially reduce your profits. Instead, choose Quick Lending and get the funds you need when you need them.