Hard Money Bankers, or HMB, is an experienced hard money lender that takes great pride in working with clients to help them get the financing they need in a professional, expedient manner. They are currently doing business in Maryland, Washington D.C., New Jersey, Virginia, and Pennsylvania.

Hard money lenders may have negative connotations after several predatory lenders made risky loans in bad faith, but these players have thankfully been eliminated from the marketplace. Today, reputable firms such as Hard Money Bankers help clients finance real estate deals that they could never have pulled off through a traditional bank.

If you’re unsure whether a hard money loan is right for you, the experts at Hard Money Bankers offer the following tips to help you decide.

What Is A Hard Money Loan and Ways It Can Help You

A Hard money loan is simply any short-term loan secured by real estate. It is often used to finance a real estate transaction, though borrowers may choose to use a separate property than the one they are purchasing as collateral.

Repayment is generally over a 12-month term, with small payments to cover interest leading up to a balloon payment at the end to cover the majority of the balance. However, longer terms and different repayment structures are available as well.

Hard money loans are provided by an individual investor or group of investors from their own money, as opposed to banks that use funds deposited by their clients to finance their deals.

Hard money lenders take on more risk than a bank does, so the interest rates charged tend to be a little bit higher. However, hard money loans offer several advantages over their more conventional counterparts.

For example, the value of the collateral property is the most important consideration when approving or denying any funding request. Hard money lenders will look at other factors such as income and credit score, but a borrower can still be approved without those things if they have sufficient equity in a valuable property.

The approval process is also faster through a hard money lender than a bank or credit union. Mortgages take up to a month to iron out, giving a seller plenty of time to get rid of a property you are interested in before you make a move.

By contrast, hard money loans may be approved in a day and funded within a week, giving you access to your funds much more quickly than someone relying on a traditional loan structure. This can be a positive differentiator that helps your offer stand out among several competitive bids!

The following transactions are among the most common ways people use hard money loans:

1. Fix and Flip Properties

Purchasing a cheap property, fixing it up, and then selling it for a profit is a classic way of making money in the real estate market. Unfortunately, banks often refuse to fund amateur investors due to the amount of risk involved. A hard money loan from HMB can be a great way to break into the industry, establish a favorable credit history, and ultimately procure better interest rates from a traditional bank in the future.

2. Construction Loans

Construction loans carry a lot of risk for lenders, as the ultimate collateral doesn’t yet exist when the loan is taken out. They have become very difficult to procure since the recession in 2008. That said, real estate investors still need access to financing to build new homes. A hard money loan is a more accessible way to bypass the nit-picky banks and make your dream into a reality!

3. Land Loans

Unimproved land can be difficult to procure financing for as it isn’t possible to live on right away. This makes it easier for borrowers to abandon their property and the loan, leaving the lender stuck with property that has no immediate use. That said, hard money lenders are often willing and able to help you purchase land that a bank has no interest in.

Get More Lending Tips From Hard Money Bankers

If you’re interested in learning more about HMB and the financing solutions they can offer, make sure to follow the company on social media, watch their videos on Entrepreneur.com, and visit them online at HardMoneyBankers.com.