Why You Should Choose a Hard Money Loan Over the Conventional Option

You have many options regarding the loan you choose for your real estate investment, but which one is the best for you? With so many options available, narrowing down which is right for you and your situation can become challenging.?

For those choosing to do a fix&flip or rehab project, the type of loan you choose can make a world of difference when it comes to obtaining the property, conducting the renovations, and selling in a timely manner. Because of that, many real estate investors choose a hard money loan over a conventional loan. Now, I am here to tell you why.??

You'll Get Your Money Faster

If they are known for anything, conventional loans are known to be time-consuming. It could be months before there is a response, and that could leave you without a property. Investment properties tend to sell very quickly, so it is essential that your lender understands the situation and can provide you with an answer and your money sooner rather than later. That is exactly what a hard money loan can do for you. It is a much shorter process to qualify for the loan and to obtain your money since the investment is not coming from a large corporation such as a bank. With a hard money loan, you no longer have to stress about missing out on a great investment opportunity.?

There Are Fewer and Less Challenging Qualifications

The qualification requirements also differ significantly between hard money and conventional loans. Conventional loans have a very long list of qualifications that applicants must make to be considered for a loan. All of these qualifications revolve around the applicant's credit and financials. The application and qualifying processes can be extremely long and strenuous, and many might not qualify at the end of the day. On the other hand, a hard money loan's list of qualifications could fit on a sticky note. Additionally, hard money lenders do not focus on the applicant's financial state, although credit is considered. They put more value on the property to dictate the approval of the loan. This allows more investors to qualify and get their dream properties.?

Time Frames Are Shorter

Another benefit of hard money loans over a conventional loan is the overall time frame of the loan. If you are looking to invest in a fix&flip or rehab project, you will likely not be spending years and years on the property and will want to move to the next one with no ties to the previous. Conventional loans make this process a bit more challenging as their time frames for payments might be longer than the actual project, causing investors to be tied to property after they are done. With hard money loans, the type of project is taken into consideration when writing up the loan to ensure that investors are not dealing with long-term loans throughout their future endeavors.?

Flexibility Is a Key Aspect

Flexibility within a loan seems like a far-fetched concept, but within a hard money loan, it is something that is extremely important for both parties. Hard money loans tend to be extremely flexible within their loan terms and approval process. Additionally, hard money loans can be negotiated with the lender. With the ability to have a conversation about the loan before signing for it, hard money loans are already far more flexible than any conventional loan could be. Conventional loans follow the rules and restrictions given by the bank, causing investors to follow strict, immovable guidelines. Flexibility can be a great asset in a loan.?

When deciding which type of loan to apply for, you have an important choice to make. It can change the whole of your investment plan, so choose wisely. If you have further questions or wish to apply for a hard money loan, send me a message or contact the team at KC Investor Funding .