Loans for People with Bad Credit
Facilitating the sale of commercial or residential properties can be a difficult task in today’s marketplace.
As lenders refuse to offer up the necessary capital to those with SOLID credit, finding loans for people with bad credit is next to impossible. This dynamic is preventing the real estate industry from skyrocketing, as it leaves the banks with thousands of homes in foreclosure.
To counter this trend, more and more buyers are seeking out secured property loans, as they have much lower credit requirements and can provide a means of financing distressed properties for purchase.
Hard money loans, as they are often called, have been on the rise, growing in popularity in both the residential and commercial markets.
Private Funding Reduces Red Tape
One of the most important aspects of a hard money loan is the source of the funding. Because these secured alternatives are privately funded, the property acts as collateral. Further, these loans will often cover up to 70% of the property’s value, which creates a “risk buffer” of sorts for the lender. In these situations, the borrower usually provides a down payment of 30% to cover the remaining property amount that isn’t financed by the private investment group.
Hard money loans offer a simple alternative to the strict criteria currently being leveraged by the large banks. Real estate professionals continue to explore the various options associated with hard money, as these lenders can help grease the proverbial wheels on property deals, helping to put families in homes and assisting in the creation of commercial real estate portfolios.
Anyone interested in finding loans for people with bad credit would be well-served to research the hard money industry. Not only will they find funding, but they’ll save weeks on the application process!