With low home values in many key real estate markets, many new and growing investors are buying up property quickly. However, most traditional mortgage lenders remain less confident about market conditions in many areas and have very stringent borrowing guidelines in place, making affordable traditional mortgages difficult to obtain, especially for the unseasoned real estate investor. Hard money lending can provide a viable, effective solution for this financial need.
Limitations of Traditional Real Estate Financing
A number of factors are impacting the ability for would-be investors to purchase real estate using traditional loans:
- These loans come with numerous restrictions and make it difficult for those hoping to flip property quickly to secure the loan.
- Most loans require credit scores and proven track records of financial success, especially for an investor rather than a live-in owner.
- The funds to make repairs are limited in traditional, short-sighted mortgages. It’s too costly, too time consuming, and too limiting to use traditional mortgages to purchase, fix and flip, or even maintain and rent real estate.
Hard Money Loans Are An Important Solution
Comparatively, hard money loans are a much more viable solution for the real estate investor because they resolve many of the key pain points of traditional mortgages. Also known as private lenders, these financial tools are more readily used today than previously because they are well-suited for the fix-and-flip and rental investment market.
Advantages of Hard Money Loans
Fast Loan Turnaround - Hard money loans are secured quickly, unlike traditional loans. This allows you to purchase fast, repair quickly, and get the property back on the market.
Available for Hard-to-Fund Properties - Loans from hard money lenders are more readily available in situations where traditional loans would not be an option, such as homes that require significant repair.
Application Process Simplified - You need funds right away to make the most of your deals. Traditional mortgages can take up to 30 days for approval, whereas hard money loans are secured faster in part due to the limited application process.
Credit Does Not Have To Be Stellar - A big difference in hard money loans is their availability to those who may not otherwise qualify for a traditional mortgage loan. Credit qualifications are not just score-related, but capital- and asset-related as well.
Catalyst Funding is Your Hard Money Solution
We make decisions quickly to ensure fast decisions on investments, allowing you to secure the best deal possible. Catalyst Funding opens the door to real estate investors seeking out competitively priced, fast loans to pay for properties. The funds can be used on a wide range of single-family homes and those with multiple residences. With a fast and easy application process, many borrowers and real estate investors find hard money loans to be ideal.