Private lending is a viable option for anyone who cannot obtain loans through traditional banks because of restrictive requirements. These restrictions often include factors such as bad credit or a short time frame. A popular form of private lending for real estate purposes, hard money loans typically last between one and five years and have an average interest rate for Atlanta borrowers of 13.3%.
These may seem like fairly common terms for a loan, so what makes going to a hard money lender so beneficial? Let’s take a look at the top reasons why these loans benefit borrowers.
Flexibility
As traditional loan agreements go through institutions with hard-line policies, such as big banks, they don’t typically allow you to change terms to fit your own needs. In contrast, hard money lenders evaluate every deal on an individual basis. Without a standardized underwriting process, this individual loan design will allow you to tweak factors like your repayment schedule.
Speed
Once you establish a relationship with your private lender, the loan application process moves much more quickly than that of a traditional loan. Hard money loans have this expedited timeline because lenders are not as concerned with a borrower’s financial position. Rather than wasting time on reviewing your bank statements and verifying your income, hard money lenders will simply focus on the collateral you’re offering in exchange for the loan.
Approval
In general, the collateral a hard money lender needs is the value of the real estate for which you need the loan. In other words, the lender will lend you an amount equal to the worth of the investment property you are buying. This makes receiving approval for the loan much more likely, especially when compared to lenders that need borrowers to have picture-perfect credit scores.
From quick approvals to flexible terms, private lending can offer loan options for borrowers who otherwise wouldn’t be able to obtain the loan they need. To learn more about the hard money loans available to you, contact Hard Money Georgia today.