Are you struggling to get a loan to finance your real estate deal?
Traditional banks and credit unions often reject high-risk loan applications that are meant to finance real estate transactions.
Instead, borrowers can always turn to private money lending firms and seek out hard money loans for new property investment.
We explore how hard money loans are designed to help real estate investors and can help them close real estate transactions within just a few days!
How do Hard Money Loans Work?
Hard money loans are secured against a tangible real estate property called collateral. This lowers risks for the private money lenders and helps them extend short-term hard money loans to borrowers. Often, borrowers apply for hard money loans to finance their real estate transactions and sign lucrative deals within a short amount of time.
Here’s how these loans can help borrowers secure hot properties quickly.
Quick Approval and Fund Release Process
Since most lenders are more interested in the collateral value, application examination takes less time. The underwriting team will review the application, appraise the collateral for its current and anticipated resale value, and release funds within just a few days.
The lenders don’t dig deep into previous financial records, bank statements, credit histories, or DTI ratios. This ensures that the application approval takes less time, and borrowers can get approved and receive funds in no time.
More Flexible Loan Terms
While most banks are federally insured and have to follow strict global regulations, private money lenders aren’t strictly regulated.
Bank loans can come with stringent requirements and fixed loan terms. On the other hand, private money lenders try to reduce risks with high-interest rates and offer loans to borrowers with high-value collateral to secure these hard money loans.
This allows them to draw up flexible loan terms for borrowers. From working out interest rates to creating convenient repayment strategies for borrowers, private money lenders simplify the loan terms for their clients.
Customizable Solutions for Borrowers
While banks are risk-averse lenders looking to extend long terms loans with low-interest rates, private money lenders like to play the risky game and make more profit in a short time.
Banks might avoid financing real estate transactions or fix and flip properties as they can come with higher risks. If the borrowers default on their payments, they might lose big money!
However, private money lenders can recoup these losses by foreclosing collateral, reselling it, and getting high profits. Whether clients are looking to sponsor a raw land development project or need funds to flip a residential property, private money lenders can draw up customizable solutions and loan terms unique to every borrower’s needs.
Seeking Hard Money Loans with Commercial Private Equity
Commercial Private Equity has been providing customizable financing solutions to borrowers for the last 75 years. Our private money lending firm extends hard money loans, bridge loans, acquisition and development loans, and construction loans to real estate investors and developers.
Get in touch with our representatives to apply for our hard money loan programs today!