There are many rumors and misconceptions surrounding hard money loans. Often these myths have very little truth to them.
There are many advantages to getting hard money loans. After reading the four common misconceptions below, we hope you’ll realize contacting a hard money lender could be the perfect financing option for your situation!
Misconception #1: Hard money loans are for desperate people.
People who go to a hard money lender are usually not desperate.
This misconception most likely stems from the dramatized scenarios you see in movies or TV shows.
Often the people who do business with hard money lenders are smart business individuals that want to work with private investors.
It is a fast and easy way to get a loan without the hassle you would normally get with banks. The loan also offers a lot of flexibility where you can negotiate terms you feel comfortable with.
This freedom is valuable to business people and is one of the main reasons why they choose this option.
Misconception #2: Hard money lenders are loan sharks.
Investors do not give out hard money loans unless they deem it is wise. Often the goal is to make a return.
Hard money lenders are smart business people who want to make it easier for you to pay the money back, so they make a profit.
Loan sharks set hard and impossible terms that individuals cannot pay back. This type of situation is not present when you deal with a hard money lender.
Also, in most transactions the hard money lender has no idea who the borrower is.
They only know the situation and make a decision of whether or not to give out the money if they feel comfortable with the collateral the borrower has put in.
Misconception #3: Hard money loans are more expensive.
Interest rates on hard money loans are much higher than traditional ones. However, you save a lot of money in the long run.
If you want to get money within a few days so you can buy, fix, and flip a house for a substantial profit, then this financing is the best option for you.
The time you waste getting a traditional loan means you miss out on profits. A hard money loan is a flexible option to allow you to get money quickly.
The convenience that comes with hard money loans usually outweighs the cost that is associated with them.
It also allows you to sell the property much faster, so when you look at the big picture this type of loan is the most cost-effective option.
Misconception #4 – These loans have Draconian rules.
This myth is similar to the idea that hard money lenders are loan sharks. However, this is not true.
Most lenders are individuals that are looking out for the investment. They want everyone to win, so the rules are often quite reasonable.
Also, as a borrower you can negotiate the terms, which makes both parties feel comfortable.
Work with an Experienced Hard Money Lender
There are many lenders out there to choose. If you work with Noble Mortgage, we will make sure you get your money quickly with terms you feel comfortable with.
These are just a few of the many common misconceptions about hard money loans out there.
It’s no surprise that people have many questions about hard money loans and need guidance on their journey to find the perfect financing option for them.
So if you’ve been considering a hard money loan for your residential or commercial property, contact a trusted hard money lender like Noble Mortgage to get answers to your questions. Our main office is in Houston, but we also offer hard money loans in Dallas, too.
Call us at (713) 680-8100 or fill out our short form to speak to one of our team members. Our goal is to provide you with unmatched financing options with outstanding customer service backed up by a 5-point guarantee.