Debunking Common Hard Money Loan Myths

a hand dropping a coin into a piggy bankIf you want money to invest fast, then a hard money loan is the answer. Private hard money lenders are experts in this type of financing, which offers investors the quick capital they need for their investment projects. Unfortunately, hard money loans are surrounded by misconceptions, probably because of the little information available.

Read on to discover the truth behind the common myths about hard money loans.

Myth #1. Hard money lenders are loan sharks

One of the most common misconceptions surrounding hard money lenders is that they are criminals who have shops at the pool hall to service loans through violent henchmen. This is far from the truth because private hard lenders in Florida and any other state are successful investors and entrepreneurs. They are experts in the field; therefore, they understand the financial needs of borrowers.

Myth #2. Hard money loans are difficult to obtain

On the contrary, hard money loans are easy to apply for and secure. Unlike the conventional loans, these loans focus on investment opportunities as opposed to your credit score and bank account. But that doesn’t mean every borrower can access the loans. It means hard money lenders overlook some issues that conventional lenders pay attention to, such as your income statement.

Myth #3. No cash is required

Most potential borrowers have this misconception that they don’t need money as long as they fall under a specific loan-to-value ratio. Most lenders will require the borrower to provide their general financial situation, which is essential in knowing that the borrower has enough financial reserves and capabilities.

Hard money loans are a lifesaver to investors who need cash immediately. Having understood the truth about these loans, you can now rely on them to buy investment real estate. It’s important to research about the lender before getting into business with them.

Posted on by Ann Klatt in Money Talks

About Ann Klatt

Ann's love for discovering new things has led her to different parts of the world. Though she is now based in Miami and works as interior designer, she still finds time to travel and experience new culture.

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