Debt is a four letter word that instills fear into the hearts of many. Unfortunately, debt is very easy to acquire, and before you know it you can feel consumed. Know you are not alone, as the latest statistics from the Federal Reserve indicate that the consumer debt in the United States continues to regularly increase, as it reached almost $3.4 trillion in May 2015.
However, there are methods to help get you out of your debt. One option to consider is a hard money loan. Simply put, these loans are given to you by a private hard money lender instead of a bank, and provide a flexibility that banks cannot offer. There are many myths about hard money lenders and loans, however, so here we have debunked a few common myths for you.
Myth: Those who apply for hard money loans are desperate and bad with their finances.
Fact: This couldn’t be further from the truth. While some people do apply for hard money loans when they have been denied by their banks, others tend to use this method when they would rather work with a personal investor and private hard money lender instead of larger, corporate banks.
Myth: All hard money lenders are dishonest people.
Fact: False. Private hard money lenders are business people who provide a loan based off of a real estate investment. Considering the fact that they do not take into account the borrower’s credit score, they use physical property as a way of collateral. They are exceptionally fair, and every agreement you have with them will be through legitimate contracts.
Myth: Hard money loans are more expensive, therefore not worth your time.
Fact: It is true that there are higher interest rates with hard money loans, but this does not mean you will have a total loss. For example, if you invest your loan into a house flip and bring in a hefty profit, those higher interest rates may not be too much of an issue in the long run.
Myth: If I invest in a hard money loan, I will not be allowed to invest in a soft money loan.
Fact: There are no rules against this, so do not feel as if you are limited in your loan options if you decide to go towards a hard money loan.
Have any other questions about hard money loans? Our professionals at Maggio Capital are here for your every need.