How Does a Hard Money Loan Work? 4 FAQs Explain How
There are so many financial aspects of hard money loans, they can be quite difficult to understand. If you aren't exactly sure how does a hard money loan work, you've come to the right place.
How Does a Hard Money Loan Work?
Hard money loans are short-term loans that are funded by private or fund investors. Rather than working with traditional lenders like credit unions or banks, which typically involves miles of red tape and financial difficulties, hard money loans are a much more viable option for people who are in need of immediate financial assistance.
How much cash can I get?
The amount of money hard money lenders can give to the borrower is solely based on the actual value of the property involved. The good news is that instead of being concerned with credit as much, private lenders are much more concerned with the value of the property, allowing you to potentially acquire a much more quality loan.
What kinds of properties can I get a hard money loan for?
Although some lenders might specialize in a specific type of property, there are plenty of different properties you can get borrow lending for. Whether you need lending for a single-family residential home, multi-family residential loans, or other types of property, as long as you're contacting a quality hard money lending company, you'll have nothing to worry about.
What's the payment duration like?
With private hard money loans, you'll be able to acquire your loan nearly right away. It's important to realize that the payment period duration of hard money private loans is much shorter compared to the traditional loan method. Traditional loans can usually go from 1 year up to 20 years, but private loans can only be granted up to 5-years in duration.
When should I invest?
As soon as you're granted a hard money loan, no matter the property or how much you borrowed, you should move quickly on your investment. Have all your essential documentation prepared so you can put the loan to use right away.
If you want to learn more about how to acquire a hard money loan, contact Maggio Capital today!