Hard money loans are financing strategies that are mostly used by real estate investors. The seasoned investors might have already known about how the process works, but if you are a new investor you need insight into how the process works. When you know about the benefits of these loans, you will make an informed decision before acquiring your next loan. The following are the main advantages of hard money loans.
1 Fast Approval and Funding
The process of applying for hard money loans Chicago is not complicated. All you need to do is to fill out a standard loan application and you will get the loan within a few minutes. When compared with the other types of loans where you have to fill out numerous papers before getting a loan, this type of loan is better. The other types of loans might take several weeks before approval and you might miss out on a lucrative deal to another real estate investor.
Once your hard money loans Chicago money has been approved, you can receive the money within two weeks. However, you can request the hard money lender to hasten the process, and they can reduce the time to five days.
2. Hard Money Loans Make The Real Estate Investors Offer Stronger
When you've acquired a hard money loan, your offer will be viewed as being stronger than the other clients. This is especially in cases where one property has multiple clients who have conventional bank loans. In such a situation, your loan offer will win against others.
If you have been in the real estate industry for years, you might have heard of situations where a bank terminated a loan application that ruined the deal. Hard money lenders can not cancel a loan in the middle of a loan application process and this makes it the better choice of funding as compared to other loans.
3. Income History and Perfect Credit Scores Are Not necessary
When applying for other types of loans, the lender will consider your credit score and your monthly income before approving your application. If you don't meet their requirements, the lender will not approve your application.
Hard money lenders on the other hand only consider the value and equity of the property you offer as collateral. If the value and equity are satisfactory, the lender will approve your application without any other demands.
4. Getting Free Advice From a Real Estate Expert
The process of acquiring a hard money loan is like a partnership. Both you and the lender want a smooth transparent deal. The lender does not wish for any hitches that might halt the process.
A good hard money lender will give their honest opinion about your project, and they will discourage you from continuing with it if they foresee a problem. The lender will unearth a problem you might have not noticed and which could have affected the project if not dealt with in a timely manner. The advice will give you confidence in the deal knowing that there is nothing to lose in the process.