Traditional Vs. Private Lending
Traditional lending is based on your ability to repay loan. Banks will look at your credit score or debt-to-income ratio. If your scores are too low, you have debt that’s beyond your income, or below the financial institutions’ safety level of debt-to-income ratio, then you may not qualify to repay the loan.
Hard money lending considers different factors, which is why it can be a great solution. In addition, hard money allows you to continue your projects and focus on growing your empire all while remaining protected.
One of the most attractive features of hard money and reasons people turn to it is because it allows them to close quickly, close with sub-par credit and even close with a reported income that won’t qualify. How is this possible?
Hard money lenders based their underwriting on the value of the hard asset. This means that if you get into a situation where you are unable to repay the loan, the lender can take the asset and get their money back, regardless of your income or credit. Also, in terms of time, they can move exponentially faster because they don’t have the regulations of conventional lenders.
Many hard lenders will still ask you to provide your credit score, income statement and even complete a background check however, these don’t necessarily play a large factor into getting the loan or even the loan terms. In fact, the terms are usually given most favor by experience as a real estate investor.
The more experience the borrower has, the more easily the lender can structure a loan using a higher LTV, in addition to lowering closing costs.” Many of the conventional financing options available don’t take these strengths of the borrower into account. Meanwhile, hard money lenders like LendSomeMoney.com has limitless capital to get the deal closed and for those with experience
For more information about how we can assist and protect your investments, contact Michael Barker: MBarker@LendSomeMoney.com.