A hard-money loan is defined as a short-term loan that’s non-conforming and used for investment or buying commercial properties that do not originate from traditional lenders. Instead, this loan comes from private companies or people who accept an asset or property as collateral. Most people or commercial borrowers in San Antonio may resort to sourcing hard money loans as a result of their mortgage or loan application being denied. They also opt for hard money in order to avoid the lengthy process that traditional loan application entails. Hard money loan is guaranteed by assets or properties and come with a fast process. If defaulted, San Antonio hard money lenders can seize the assets and use them to recover the losses.
How to Secure Hard Money Loans in San Antonio
San Antonio hard money lenders approve loans according to the value of assets being purchased. The lender does a fast check on the borrower’s finances or credit. This does not delay the processing time as it is always faster than traditional loan applications. Borrowers often receive their money in a few days instead of weeks or months. The downside of hard money loans is that the lender takes a lot of risks, and as a result, these loans are always more expensive. They attract higher interest rates. In some cases, borrowers are forced to provide larger down payments during the application process. In addition, hard money loans come with very short repayment periods compared to traditional loans.
The Uses of Hard Money
There are many reasons why people borrow hard money. Typically, below are some of the reasons why borrowers go for hard money loans.
Real estate companies often go for hard money loans to help renovate recently purchased low-cost houses. They also make repairs that increase the value of the property before flipping the houses to make a profit. Since such projects happen fast, the flippers rely on hard money to finance the tasks faster. In addition, since the flippers aim to sell the houses within short periods, they do not opt for lengthy loan terms associated with traditional mortgages.
Buying Investment Properties
People looking to invest in rental properties who do not meet traditional loan requirements go for hard money loans to finance the investments. However, these investors are often denied traditional loans because of their credit history. Additionally, they might require more money than what traditional lenders offer. Therefore, it becomes necessary to borrow hard money in such circumstances.
Buying Commercial Properties
Business people might use hard money to purchase commercial properties should they not access traditional loans. In addition, hard loans can come in handy to help people purchase unique properties which do not meet the requirements for traditional financing. Therefore, hard money processed fast is essential in the timely purchases of such properties.
The Pros of Hard Money Loans
Hard money loans come with several benefits. These are highlighted below.
They are Approved Fast
Hard money loans are processed faster compared to traditional loans. It takes a few days for the loans to go through. On the other hand, traditional loans might take weeks or even months before they go through. Therefore, the fast approval times of hard money loans are appreciated by many borrowers.
The Approval is Based on Assets
Hard money loans are approved based on a borrower’s property, unlike traditional loans, which approve loans based on credit history. Therefore, those with a poor credit history and who want to finance their diverse needs can always opt for hard money loans.
They are More Flexible
Hard money loans come in handy in financing a lot of projects. Such examples are mentioned above. Traditional loans, on the contrary, may be restrictive. Some traditional loans cannot be processed to finance certain projects.
They are Less Strict
Hard money loans are less strict compared to traditional loans. They do not require a lot of requirements for the loans to be approved.
Hard money loans in San Antonio have become an asset to many business people looking to finance their projects. Hard money comes with tons of benefits, including fast processing times. As a result, many business people find them effective in their businesses. In addition, this type of financing supports diverse projects that need financing with minimal restrictions. Therefore, those sourcing fast loans to finance their projects can always settle for hard money loans.