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For a hard money loan to be approved, the lender checks the value of the property that is being purchased through the loan. The lender may also do a quick overview of your past credit and finances. But it is assured that it will be a quicker process, than a traditional loan.
Hard money loans are used for a number of reasons. These are as follows:
- Investors who earn money by buying low-cost properties that require renovation, utilize hard money, and loans to remodel them for profit. The fast form of financing helps these investors to sell the property within a short period of time.
- These loans are also used to purchase investment properties and commercial properties. If you do not qualify for a traditional loan then you can make use of a hard money loan to purchase your property.
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Advantages of a hard money loan:
- Hard money loans can be closed more quickly than traditional loans. This is due to the fact that the lender is more concerned about the collateral that you are holding for the loan. Your financial and social position is not as important as the collateral you are keeping as a mortgage. There is no review of your bank statements or credit reports.
- There is no underwriting process involved in Hard Money Loans in Chattanooga, unlike traditional loans. These loans are evaluated on a specific basis. When you are negotiating with private companies or individuals, there is no policy. This means you have the freedom to revise the repayment schedule and the duration of your loan.
- There is a greater approval amount in the case of a hard money loan. If you are purchasing an investment property, the lender will approve the loan for as much as the worth of your property.
- There is no hassle of prepayment penalties. In the case of a hard money loan, the lender is invested in your success and approves the loan without any payment, penalties or additional fees. On the contrary, traditional institutions charge penalties and additional fees considering you have a change of circumstances.
- Your loan is approved even if you have issues with your bank for example bankruptcy or poor credit scores. Hard money loans in Chattanooga focus specifically on equity and not policies.
Hard money loans excel in today’s day and age because the processing is smooth, which lets you achieve your goals on the fly. The lenders that offer you hard money loans are also equally invested in your betterment.
