Building a real estate development can be a highly lucrative business venture, but it can also be a substantial investment. Not surprisingly, many people will have to secure some type of funding to complete these projects, but the dizzying array of lending options can be somewhat confusing for people that are undertaking this type of business venture for the first time. This can lead them to overlook some of their options for financing, such as hard money loans. If you have little or no experience with this type of loan, these questions may provide some much-needed clarity to you.
Can You Get a Hard Money Loan If You Have a Poor Credit History?
Securing enough financing for these major projects can be exceedingly difficult for those that are plagued by a poor credit history. In addition to causing you to be denied a loan, these issues can substantially increase the cost of the loan by resulting in higher interest rates.
Fortunately, hard money loans can be the ideal solution for individuals that have a poor credit history. These loans are primarily secured with the value of the property that is being developed. This means that the amount of loan you can receive will largely be governed by the value of the property you are developing as opposed to your personal financial history.
What Is the Process for Applying for a Hard Money Loan?
Many people may think that getting this type of loan has a very different process from more traditional capital sources, but this is not actually the case. You will be required to submit proof of ownership as well as documents proving the value of the real estate. In some cases, the lender may want to have the site independently appraised, but this process can usually be done relatively quickly.
Due to the heavy emphasis on the value of the property, these loans can be finalized soon after the appraiser has completed their work. As long as the documents requested by the lender are correct and the value of the land sufficient, you should expect to receive some type of loan for your project.
Hard money lenders can provide you with a source of capital when you are undertaking major real estate development projects. Yet, you may not know much about these hard money lenders unless you have used their services in the past. Once you understand that these lenders are not primarily concerned with your credit history and what the process for applying for this financing will be like, you can make the right choice for financing your development.Share
11 September 2015
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