Most home buyers use conventional loans. Lending institutions lend money to buyers based on income and credit history. Hard money loans don't require credit scores and are more dependent on assets. Hard money loans can be used for situations that are unique and often very difficult.
Private investors can provide easily available hard money loan in Seattle to borrowers who are able to take the time and assess their entire situation in a way traditional lenders cannot. Private investors understand that even if a borrower misses a few payments due to something like losing their job, it does not necessarily mean that the buyer can't repay his loan.
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This is an example of how hard money can work. Private investors can help homeowners who are so far behind in their mortgage payments that they cannot catch up. His credit score will soon be restored and he is eligible to refinance as a traditional borrower.
Hard money loans have strict terms, which is why it's important to refinance as soon as possible. It is a costly, but valuable option that comes with an average interest rate of 10% to 18%. Rehab purchases are another reason to use hard cash in a market driven by foreclosures. Investors are attracted to a property that they can renovate quickly and profitably.
There is a buyer waiting for the house once the work is done. The hard money loan can be obtained much faster and without the hassle of traditional loans. Hard money loans are not an easy option for people with poor credit. The hard money loan closing costs must also be paid upfront.