When your specific financial situation is such that borrowing money from a bank or institutional lender isn’t possible, many people turn to hard money lenders. Hard money loans essentially refer to loans that are provided by private individuals and corporations. Rather than being based off of your credit score like a standard loan, hard money lenders are more concerned with your income and how the asset that they’re helping you obtain via their loan will make money. Hard money loans, in general, have shorter durations than standard loans from banks. Thus, the lender is more concerned with how you’re going to make money off of the property that you’re buying with their loan money because they need to make sure that you’re going to be able to pay off your loan within that shorter time period. In general, companies and individuals involved in hard money lending want to make sure that you have a solid plan to turn a profit quickly so that you’re able to pay off your loan quickly and they’re able to take that money and issue another loan out to another individual.
As you could have guessed, it’s important that you find a quality hard money lender when you’re considering going down this path. The following is a list of five qualities that you should look for in such a lender.
1. Ethical. First and foremost, it’s critical to find an ethical hard money lender. Unfortunately, due to the higher interest rates these types of loans typically come with, many companies out there are simply looking to make money at the expense of their borrowers. The best hard money lenders are ethical, which means they work hard to create a loan that helps both themselves and the borrower. In other words, they work hard to create and approve loans that can actually be paid back by the borrower.
2. Experienced. As with anything, finding a hard money lender with years of experience is a plus.
3. Honest. Along the same lines as the first quality, it’s important to find a hard money lender that’s honest about the interest rates on the loan and when it needs to be paid back by.
4. Well Thought Of. Fourth, find a lender that’s well thought of by their past borrowers.
5. Educated. Essentially, finding a hard money lender that’s educated simply means finding one that knows their industry incredibly well. They should know how to write up a loan that’s both beneficial for them and beneficial for the person they’re lending to. They should have a strong understanding of the types of loans that typically work, as well as what a successful loan looks like and how it should be structured.
Finding a hard money lender that’s ethical, experienced, and open can be difficult, which is precisely why Montegra Capital Resources is such a great find. With over four decades of experience in the hard money lending industry, they’re exactly the type of lender that you can trust with your hard money borrowing needs. Visit their website and read their testimonials to see just how much their past customers have enjoyed working with them.