No Credit, No Problem: How to Invest with a Bad Credit Loan
Believe it or not, bad credit loan is a real thing and it can be used for real estate investing. Real estate investing is always a good idea but the process can seem daunting, especially if you have bad credit. Fortunately, there are ways for individuals to invest in real estate with bad credit. The answer is hard money loans.
What is a hard money loan?
Hard money loans are short-term loans for a real estate investment. These individual generally flip the properties in order to make a profit. Hard money loans are also available for land purchases. Because the hard money loan process is significantly shorter than that of a traditional loan, investors use hard money to begin your real estate investment quickly. Before you apply for a hard money loan, there are the hard money loan facts that you should consider.
Can you get a loan with bad credit?
Hard Money lenders really don’t look at credit like traditional lenders do but income can be crucial. Hard money lenders approve borrowers who have had foreclosures, bankruptcy, mortgage lates, collections, etc. Income will be verified through borrower’s bank statements. Though the loan is based on the value of the property that serves as collateral, hard money lenders still need to verify that the borrowers can make the payments before they can get any money.
Who are these lenders?
Hard money lenders are not loan sharks. They are lenders with less regulations than traditional lenders and they can help the borrowers with their investments more efficiently than banks. Hard money lenders are not like traditional lenders. They don’t just finance the loan and then you never hear from them again. Hard money lenders are on your side and you should be able to work as a team. Without respect, that relationship falls apart. You can find out if the hard money lender values respect by checking online for testimonials from past borrowers.
Alternative investors do not give out loans unless they deem it wise and profitable. Their goal is to make a return, after all. Hard money lenders are specialists who will help the borrower find a loan that works for them. The terms of a hard money loan are not impossible, in fact they are incredibly flexible and the lenders make it easy for the borrower to negotiate.