As highlighted earlier, hard money loans tend to be attractive to property flippers and borrowers who can’t qualify for traditional loans. Here are three pros of hard money loans.
Hard money loans have a quick turnaround, meaning they have a shorter approval process than traditional loans. Since the lenders are mostly looking at property value, cash can be available in a matter of days or weeks. However, hard money loans for consumer purposes take longer to process as they are subject to TILA-RESPA Integrated Disclosures.
With hard money lenders, a borrower can negotiate repayment terms and loan periods. Borrowers are not required to follow the same lengthy and stringent underwriting process as traditional lenders.
Poor credit history will not prevent an investor from accessing the loan. In general, lenders look at a few factors such as equity in the property, amount of cash reserves, and the investor’s experience in real estate and their exit plan.