There are many types of loans that can be acquired, including business loans, private loans, student loans, and also something known as hard money loans. The term “hard money” was coined in the 1950s and these loans are based on property assets, not credit. Hard money loans can be used for a number of reasons, and are particularly notable because they don’t have to be acquired from a bank. If you’re looking to acquire a hard money loan, this article will take a look at several things you should know about them.
- They Can Be Obtained from a Variety of Hard Money Lenders: One thing to know about hard money loans is that they can be obtained from a variety of hard money lenders. These lenders can be anyone from friends and professional acquaintances to professional hard money lenders who specialize in lending these types of loans. As mentioned before, these loans don’t have to be acquired from a bank, which means even those with what is considered bad credit can acquire a hard money loan.
- They Have Short Lending Periods: Another thing to know about hard money loans is that they have generally short lending periods. Hard money loans tend to be short-term, from 6 to 24 months, interest-only, and available only for non-owner-occupied properties. The biggest thing to keep in mind with this detail is that short lending periods mean that the loan will have to be repaid that much sooner.
- They Can Be Useful for Flipping Houses: And finally, a third thing to know about hard money loans is that they can be useful for financing flipping houses. This is a practice where run-down houses are bought for a certain price, fixed up relatively quickly, and then sold for a profit. By making a quick profit, the person with the loan can not only make a profit but be able to repay the hard money loan as well.
In conclusion, there are several things that you should know about hard money loans. These things that you should know include knowing that hard money loans can be obtained from a variety of hard money lenders, they have relatively short lending periods, and that they can be useful for flipping houses. These are just a few things that you should know about hard money loans.