How Hard Money Loans Work
A hard money loan traditionally is a short-term loan you can use to invest in real estate properties. You don’t need a high credit or pass a background check. These loans carry high-interest rates and shorter repayment periods.
What is a Hard Money Loan?
A hard money loan is a short-term loan that is typically used for the financing of real estate investments. Hard money loans are typically provided by private investors or hard money lenders, and they are secured by the value of the property that is being purchased. Hard money loans can be an attractive financing option for investors because they generally have a shorter repayment period than traditional loans, and they can also be easier to qualify for. However, hard money loans typically have a higher interest rate than traditional loans, so it is important to weigh the costs and benefits before deciding whether a hard money loan is right for you.
These loans can be approved quickly and be easier for investors to use while house flipping.
Traditional mortgages can take up to a month, FlipCo can fund in 72 hours.
What are the Advantages of Hard money Loans?
- Fast Funding
Hard money loans are typically easier to obtain than traditional loans. Most lenders do not require credit or background checks and lend off the value of an asset instead of your personal worth.
- Short-Term Loan
Hard money can be paid back as soon as your investment has been funded. Most loans offer a repayment period of 6 months to a year.
- No Capital Needed
With these loans, investors can get a hard money loan without bringing any money to the table. This allows anyone to achieve financial freedom through real estate.
- Interest-only payments
FlipCo will only require a borrower to pay back the interest of a loan rather than paying back the full amount month over month.
- Simple & Easy
Our team makes hard money loans simple and easy. We minimalize the paperwork and turnaround time by using our own private investors.
Types of Hard Money Loans
Fix & Flip Loan: A fix and flip hard money loan is perfect for real estate investors who want to buy discounted properties in need of repair to fix up and sell for a profit.
Short-term bridge loan: A bridge loan is a short-term “gap” loan that allows you to purchase property while you have an existing property to sell.
Refinance Loan: Refinancing is desired when interest rates fall, opening up the opportunity to save on payments with a new agreement.
Transactional Funding: Transactional funding is a hard money loan that wholesalers utilize to quickly buy and sell the same investment property.
Should I Apply for a Hard Money Loan?
A hard money loan can be a good option for someone who is looking to invest in real estate but doesn’t have a high credit score or a long history of financial success. These loans typically have higher interest rates and shorter repayment periods, so they are not for everyone and carry risk. However, FlipCo has a long history of working with borrowers to ensure investment success. It’s important to choose a lender who will work with you every step of the way.