We’ve all been in a situation where we need cash fast. It could be for a large amount, in this case let’s say a hard money loan. But it can also be for emergency expenses where you need a short term installment or personal loan. When it comes to real estate, not every situation is going to require the service of a hard money lender. In this blog post we’ll learn about the different scenarios that may require this type of financing.
Most people turn to a private money lender when they are facing a unique situation. That doesn’t mean they can’t get financing from a bank or traditional home lender. Did you know that many people who use this service can often get qualified for a mortgage loan. However, there are scenarios when they can’t go down that road. For example, some applicants turn to hard money companies in Texas when they need fast cash. Most online bank lenders are going to stick with an processing time of weeks or even months. Even if you work with a local lender in city say Dallas or Austin, they’re still going to stick with the national lending criteria. These requirements make it very difficult to fund projects or access much needed cash. In these situations it only makes sense to turn to a local company. Yes the rates will be higher than what you normally see. But you’re going to have a much quicker qualifying process. Some borrowers prefer this setup because they don’t need to wait as long as they would normally. They can pay the extra finance charges and get a cash refinance or fix and flip loan approved much quicker. We see this with commercial refinance loans all the time. When you talk about commercial financing, you’re looking at lengthy amounts of time to process paperwork and qualification requirements. Expensive projects can have deadlines and cost delay triggers that pale in comparison to the finance charges that you see from a few weeks of a hard money loan.
Another aspect of why it may be best to work with a private lender is the fact that most of these companies aren’t going to require an in depth review of your credit history or borrowing transactions. Bad credit is typically not going to be an issue and you may even get though with a bankruptcy as long as it’s not current and you can explain the situation. Many borrowers apply for state income loans and fall into this situation. A normal Texas bank or mortgage company won’t approve them for home financing or stated income lending because they can’t verify their income or employment.
Ultimately, it’s going to coming down to each unique situation when determining if a hard money loan is the best choice. Most people who apply for hard money loans in Texas are going to have a specific reason why they want to move forward. In some cases it’s up to the real estate lender to recommend a conventional mortgage company. Most will do this if they are better suited for that service. We know of hundreds of lenders throughout Texas. The bulk of these companies are in the greater Dallas area but you can also find them in Houston, Plano and Forth Worth. You can expect to see more firms come into service in other TX communities like El Paso and Arlington as the economy improves and more people apply for online funding.