Who Are Hard Money Lenders?

Many individuals are convinced to try their luck in real estate today

. Despite the global financial crises, that besets the economy, real estate investing remains to be a very promising business. Given this, many hard money lenders have surfaced all of them wanting to take advantage and jump into the chance of hopefully making another type of investment by lending people money. In this article, we will share with you everything that you need to know about hard money lenders.

Generally, hard money lenders are people or sometimes an institution who offer loans for the purpose of real estate investment. It comes with low credit restrictions but with high fees and rates. Because of the high rates associated with hard money loans, hard money lenders usually become the last resort of borrowers. However, they are considered very beneficial to people who are in shaky financial situations like those who are facing foreclosures or individuals who are in desperate need of loans.

Who are hard moneylenders? Hard money lenders are private investors or individuals who use hard money loans to make profit through high interest rates and lending fees. Today, many financial institutions double as hard moneylenders. Some of them even offer services that connect borrowers with other lenders in their area.

Collaterals are needed in hard money loans. In almost all cases, the house or the property is used as collateral. Because most hard money loans are risky, lenders make it a point to inspect the property before approving a loan.

Unlike normal lenders, hard money lenders do not always require a good credit report. It does not look for references. They deal with loans that banks and other financial institutions will refuse. Most of them are individual investors and so they are much less common as compared to banks and financial institutions.

What is the downside about borrowing from hard moneylenders? Fees and rates with hard money loans are usually higher as compared to the rates of traditional lending institutions. To date, there remains no average hard money loan rate but borrowers should expect the fees to double, sometimes even triple with hard money.

Should I consider borrowing from hard moneylenders? Hard money loans are primarily beneficial to people who are in desperate need of loans. They can help those who have a terrible credit history as well as those who are facing foreclosures.

For more tips on hard money lenders as well as real estate in general, go to www.REIWired.com.

by: Daniel Mc Grey

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