Investing in real estate can be an effective way to build wealth and diversify your portfolio. Investors that want to own the property outright, without parting with a substantial amount of cash, should consider a hard money loan. A hard money loan is a short-term bridge loan backed by the value of a property, rather than the creditworthiness of the buyer.
Athas Capital Group shares the advantages of hard money loans and why investors should consider them over conventional bank loans:
They’re convenient. For conventional mortgages, the application process is tedious and time-consuming. Applications are even more time-consuming due to the new regulations set forth by the Dodd-Frank Act. As an investor, you don’t have months to wait for your loan application to be approved. A hard money loan gives you the funds you need for your property investment within a few weeks.
They’re flexible. Hard money loans are provided by private lenders and not banks or credit unions. As a result, the loan terms tend to be more flexible compared to a conventional loan.
They’re backed by collateral. As previously described, hard money loans are backed by collateral, not your creditworthiness. This means you can use the property you are investing in as collateral for a hard money loan. In some instances, you may be able to use your personal assets as collateral, such as another property or a retirement account.
While hard money loans offer numerous benefits, keep in mind that they have a shorter repayment period and higher fees, compared to a conventional mortgage. To learn more about hard money loans, visit www.athascapital.com.