How hard money loan guidelines differ from traditional bank loans

Lending Guidelines of Hard Money Lenders Vs. Banks

In this video I’m going to explain how the lending guidelines of hard money lenders are very different from bank guidelines and stick around until the end of this video where I’ll explain why hard money loans can give property buyers a competitive advantage over borrowers who just use bank loans to buy properties.

Now, although most people understand how to get a loan from a bank most people have never gotten a hard money loan before so they have a lot of questions about how to get approved.

Bank lending guidelines. Well, they tend to be strict and getting final loan approval from a bank can be cumbersome and time-consuming task.

Many borrowers take this long journey with a bank to get declined at the end they can
because they can’t meet bank requirements.

The good news is that the lending requirements of Hard Money Lenders are looser and more flexible with less documentation.

Here are some examples

Most hard money lenders have no minimum credit score requirement.
Yes. That’s right and many hard money lenders don’t care if you’ve had a past foreclosure or bankruptcy.

Income documentation: Most hard money lenders do not have income documentation requirements.
This means that they aren’t taking your tax returns and calculating what’s called a debt to income ratio also called DTI, that you have to fit inside.

No appraisal requirement: Many hard money lenders will not require an appraisal
but instead many of them will value a property using a broker’s price opinion or by using an internal valuation method.

This is one of the biggest reasons why a hard money lender is able to fund faster than a bank.
And now what you’ve been waiting to hear.

Why are hard money loans better?

Why do hard money Loans, give property buyers a competitive advantage over buyers who are just using bank loans to buy properties?

Well, good opportunities and real estate come along sometimes and Banks simply can’t fund fast enough. Buyers can close more real estate deals at better prices using hard money loan because of the speed of funding and it gives them the ability to make cash-like offers with no contingencies.

buy house in cash hard money

It’s that simple. Well, if you’ve never used a hard money loan to buy a property, look into it. In a competitive real estate market where Bank lenders have strict lending guidelines a hard money loan can give you a serious competitive advantage.

If you like content like this subscribe to our channel for more.
Would you like us to fund your next Real Estate purchase? Leave your email below
and we’ll contact you. I’m Corey Dutton. I’m a private money lender.
Thanks for watching.

 

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About the author

Corey Curwick Dutton, MBA Park City, Utah - 2005 MBA Graduate with 10 years experience in Business Management including International Management. Corey is a Private Money Lender and Loan Officer. In her spare time Corey enjoys writing on topics in the private money lending industry. She also enjoys hobbies such as mountain biking and skiing in the great outdoors of Utah.