Why do people use Hard Money Lenders ? Why do investors use hard money lenders ?
In my opinion/experience: People/Investors use H$L for various reasons like their credit is low or they don’t want to rely on their credit to get financing for a deal. Also, H$L are able to get you to closing relatively fast. And there’s no ‘tie-up’ w/ a long 15 or 30+ yr mortgage, red-tape and extensive pre-approval process that’s assoc. w/ a bank. It gives you the investor the ability to purchase, rehab and resale quickly.
There are a million reasons to use HML’s.
Most use because:
1.) Quick & easy (10 days) with right numbers.
2.) Rates/terms can be reduced w/ proven track record.
3.) Reimbursement for out of pocket costs.
4.) Short terms (4-12mo)
5.) Small down payments
6.) Imperfect credit/limited income.
7.) Limited underwriting guidelines.
8.) No red tape (most of the time).