The world can be a very unstable place and the events that take place cannot always be accounted for. There are three main reasons why people need to apply for a hard money loan.
• Bad Credit
• No Incoming Source of Income
• Wealthy Investors generate Income
Anyone with bad credit knows that being approved for a loan from your bank will be almost impossible. If you need to pay your mortgage, rent or any other bills than this loan is imperative. Bad credit is hard to recover from and it could take years to have a good credit standing again. The hard part is that the bank will not loan you the money to recover your credit standing so you have to find other sources of lending. This is where hard money lending comes in.
Hard money lending was created for customers who have no other places to go, this is their last resort. These are people who have bad credit and no incoming flow of income. The bank would never give a loan to a customer like this, but hard money lenders give loans to people like this everyday. Of course these customers are a high risk to the commercial or private lenders but that is why the customer is forced to put their home up as collateral in the event they are unable to pay back this loan in time, the lenders will foreclose their home.
There are also wealthy customers who come to hard money lenders for loans. Private Citizens and businesses who buy expensive properties or who already own expensive homes and want to cash out large amounts of their equity via refinance loans will turn to private money. There is a great deal of red tape and terms and conditions that must be abided by when taking a loan from the bank, this is why many wealthy people take private loans to avoid the trouble of the bank.
Hard money lending is becoming a source of loaning for many different types of customers today, not only the desperate. If you are considering this type of loan, you may have the ability to seek it out. To do that, take some time to look at why you need it and then determine who will lend it to you. If you find that you have a need, there is likely to be a company out there that will offer you the help you need.