Blogger Bloggers Dream

How to get A Short Term Hard Money Loan

Hard money loans are usually short termed. This type of loan is usually lent to a person or borrower to help funding a real estate investment or support other collateral backed loans. Hard money loans are provided by private financing institutions or companies. This would be an appropriate option for those people who have low credit scores or not so good credit standing. They are often used as bridge loans between construction financing and long term loans. Hard money loans are, most of the time, lent to construction because private financing institutions may want finished and leased projects. Be aware that since this loan comes from a private financing institution or company, the loan processes is different from the ones in the bank. Aside from that, hard money loans have higher interest rates than any other loans.

If an individual wants to avail a hard money loan, he/she should first prepare the documents that the financial institution requires. These documents might include bank statements, W-2s, pay stubs and other items that has something to do with the person’s credit history. And even before a person signed up for the loan contract, he/she should review first the details of the contract. If there is any unclear information, he/she should ask questions.

Note that once the person signed up for the loan contract, it definitely means that he or she have understood and agreed to whatever conditions that the financing institution imposed. And an individual or borrower should coordinate with his/her lawyer about the terms and conditions of the loan contract. After coordinating with the lawyer, the borrower should have a constant communication with the financing institution or hard money lender.

Having constant communication with the hard money lender only means that the borrower is very interested with the loan. As a borrower, any needed information should be given to the financing institution on a timely manner. Just be reminded that if at any case there's a delay on lending money, the financing institution might have given it first to another borrower. Never harass the financing institution when this happened. The borrower just need to wait because hard money lenders don't keep a huge of amount of capital. They just rely on the interest that they have applied to the other loans. Meaning, hard money lenders use “cycle process”.