When it comes to borrowing money for real estate investments, there are two main options: traditional banks and hard money lenders. While the traditional route is the most common source of funding for borrowers, it may not always be the best choice. In certain situations, a hard money lender can provide significant benefits over a traditional bank. In this blog, we will discuss the benefits of using a hard money lender over traditional financing.
1. Faster Funding
One of the most significant benefits of using a hard money lender is the speed at which you can receive funding. Traditional banks have a timeline of weeks or even months to process a loan application, and there is no guarantee that an application will approve. In contrast, hard money lenders can provide funding in as little as a few days. This makes them an ideal option for borrowers who need cash quickly.
2. Less Stringent Requirements
Traditional banks typically have strict requirements for borrowers, including high credit score and a long credit history. Hard money lenders are more focused on the value of the collateral that you can provide. This means that even if you have a poor credit score or a limited credit history, you will likely still be able to qualify for a loan from a hard money lender.
3. More Flexible Terms
Another benefit of using a hard money lender is the flexibility that they offer on loan terms. Traditional banks typically offer fixed loan terms that may not be suitable for all borrowers. In contrast, hard money lenders can tailor loan terms to the specific needs of each borrower. This can include the length of the loan and interest rate.
4. Opportunity for Creative Financing
Because hard money lenders focus on the value of the collateral, they may be more willing to offer creative financing options. For example, a hard money lender may be willing to provide funding for a property that is not eligible for traditional financing. This can include a property that is in poor condition or has a non-traditional use.
5. Better Chance of Approval
Using a hard money lender can increase your chances of getting approved for a loan. Traditional banks have a strict set of guidelines they must follow. If you don’t meet all of their requirements, your application has a high chance of being rejected. Hard money lenders are more willing to work with borrowers who may not qualify for traditional financing, increasing your chances of getting approved.
In conclusion, using a hard money lender can provide significant benefits over a traditional bank. Easy Street Capital‘s industry-leading EasyBuild and EasyFix hard money loan products meet the needs of borrowers of all experience levels and provides a smooth, transparent, and efficient process. We can approve your loan in less than 24 hours. We pride ourselves on no hassle of appraisals, junk fees, or minimum FICO requirements.
Whether an investor is fixing and flipping, financing a cash-flowing rental, or building ground-up, we have a solution to fit those needs. Have a deal in need of funding? Click on the link below for terms!
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