You might have heard of Hard Money Bankers and different things about hard money loans. But, how much do you know about all these? In this post, Hard Money Bankers will share everything you need to know about hard money loans in 2021.
What are Hard Money Loans?
Hard money loans are usually short-term loans that private investors, instead of conventional banks, fund. The security for this loan is often in real estate, and the terms for are within 12 months.
However, with an agreement, it can still be extended to as far as five years. A borrower pays back the interest of this loan every month, and in the end, pays back the balloon principal. The loan amount a borrower can get is often determined by the value of the person’s real estate properties.
Property Types for Hard Money Loan
There is hardly any limit to the type of property that hard money loans can be gotten for. You can get it for industrial property, multi-family, and single-family residential properties.
However, some hard money lenders specialize in offering a particular type of property loan. So, it is better to confirm before making moves.
Please note that some hard money lenders might not be willing to borrow an owner-occupied residential property. This might be due to the numerous rules guiding these properties.
Types of Deals Hard Money Loans Can Be Used For This Year
Simply put, you should not use hard money loans for all kinds of deals. The deals should be used by those bargains that do not afford you time. If you have the time to spare, you should deal with a conventional bank instead.
Some of the deals you can use it for include:
- Fix and Flips
- Land Loans
- Construction Loans
- When the Buyer has credit issues.
- When a real estate investor needs to act quickly.RELATED: Hard Money Bankers: The Hard Money Guide for Real Estate Investors 
Who Should Use a Hard Money Loan?
Usually, hard money loans should be the backup plan for people and not the first choice. Those who should use this loan are those who:
- Have a short time to complete a deal
- Have low credit rating
- Have been rejected by their traditional bank on their loan requests
Standing Interest Rates
There is no coordinated interest rate for hard money loans because the hard money lenders vary. However, the rates are often on the high side and might be between 10 and 15 percent.
There are also no identified requirements other than the consideration of the extent of the borrower’s equity in the property. Companies like Hard Money Bankers are less concerned about your credit ratings or score. Hard Money Bankers lends in Maryland, Virginia, Washington DC, Northern Virginia and Pennsylvania.
Nonetheless, since the property is often the security, the borrower must show interest in developing it.
Finding a Hard Money Lender to Work With
You can always do this easily. All you have to do is search for a hard money lender online and add your region. The result will mostly return the names of hard money lenders around you.
If this method fails, you can attend your local real estate investor meeting. Here, you can ask for recommendations.