There are generally two routes to take when financing a development or real-estate project. You can either choose a traditional lending option or go for hard money loans. Many real-estate professionals prefer hard money loans to finance a property. As experienced investors, they’re familiar with the wide range of benefits these loans offer.
Hard money loans consist of lending through a unique approach. Unlike conventional loans that evaluate an applicant’s credit history and income as repayment insurance, hard money lenders rely on borrowers’ collateral for lending a loan. In other words, they value your collateral assets more than your financial credibility, offering you easy loans with 1-5 year repayment periods.
Here’s how you can benefit from hard money loans.
It’s a lot easier and faster to get hard money loans approved and financed. These are short-term loans that don’t require an elaborate application and underwriting process. In fact, a few things that lenders go through during the application process include the property, the amount of money you can invest, your property’s equity, and the amount of cash you have reserved to make repayments.
You can quickly get access to immediate funds if you meet these requirements. In fact, it’ll only take up to three to five days for loan approval after the application process, compared to traditional loans that can take 30 or more days.
Hard money loans don’t necessarily have a rigorous application, approval, or repayment policies. Most commercial hard money lenders don’t have a regulated underwriting process, which means they work with each borrower individually according to their specific situation and repayment capacity.
Hard money lenders employ innovative strategies for their clients by tweaking the repayment schedules without restricting them with strict policies.
Perfect for Risky Development Projects
Many borrowers resort to hard money loans when they’re trying to finance risky projects that require flipping a property. Such projects usually qualify for short-term loans so that they can be sold immediately for a substantial profit. Most traditional credit unions avoid financing real-estate investors with properties that need repairs and renovations because these projects don’t qualify for the conventional 15-year loans.
However, when hard money lenders possess your property for collateral, they don’t find your project risky. In other words, they can easily cover their losses by reselling the collateral without losing the loan amount.
If you’re looking for qualified lenders who offer flexible hard money loans in Seattle, WA, get in touch with the lenders at Global Capital Partners Funds. They provide reliable loans for commercial, private, and asset-based financing for real estate investors and borrowers in Seattle. Contact them to learn more today!