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Hard Money Basics: 4 Parties Involved in Hard Money Loan Funding

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Hard Money Loan Funding is not as complicated as it may seem and hard money lending isn’t as mysterious as it may seem. There are many real estate investors who use hard money loans but do hard money loans work? Investing in real estate is always a good idea but there are many different ways to invest. There are many real estate investors who recommend using hard money loans in your investment projects. Let’s start with the basics. Here are the parties involved with a hard money loan:

  • Borrower
  • Hard Money Lenders
  • Title Company
  • Escrow Company or Settlement Services Provider

Borrower: The individual looking for financing to buy a property.

Hard Money Lenders: The company that matches the investor with a loan investment. The hard money lender is responsible for the borrower’s loan processing, underwriting, and funding coordination.

Title Insurance Company: The company that provides the title report on the property which serves as collateral for the loan.

Escrow Company or Settlement Services Provider: The party who both collects and distributes the funds and oversees the signing of the deeds and documents.

There are many reasons why a hard money loan may be beneficial to a real estate investor. For example, if a borrower is unable to get a loan from a traditional lender because of bad or no credit. Because traditional lenders have strict regulations for loans, it can be extremely difficult to qualify. There is no room for leeway or negotiation, even if your credit score is just a point off. Hard money lenders are able to give Hard Money Loan Funding to individuals with bad credit because they focus mostly on the value of the property since the property serves as collateral.

When it comes to hard money lenders, they are your partners in the investment. You are looking for a lender who values open, two-way communication. Communication, integrity, and timeliness is most important. Finding a hard money lender to handle these investments doesn’t have to be difficult. Find out more about HML Investments here.

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