Us humans tend to have many reasons for doing the things we do.  That is definitely the case when it comes to hard money loans, and hard money lenders both from the perspective of the lender and the lendee.  A hard money loan is a certain type of loan which is asset-based.  The borrower gets a numbered amount of secured funds that come from real life property.  These type of loans usually come from companies or private investors and typically are done fast and with a lot of flexibility.

A Stronger Offer

Getting a loan by hard money makes your offer much stronger than those which are not hard money or asset-based.  Basically, you bring yourself to the top of the board with a hard money loan.  For instance, if you are making an offer on a real estate property which already has several other offers but they are from conventional bank loans then you will really stand out.

Don’t Get Shanghai’d

What this means exactly in the lending world is that you may get your offer pulled by the buyer while it’s still in escrow.  This can happen on a whim and basically kill your offer right then and you are shit out of luck no questions asked and no do-overs.  If you attain a hard money loan odds are you won’t get it pulled and if it does for some reason it’s extremely uncommon.


If the person who is selling the property is anxious to sell and they are really looking to unload it, then with a hard money loan you may be able to negotiate an even lower sale price.  Basically what happens is you can do this with the promise of a quicker escrow period and within a fast closing time.

Credit Score Doesn’t Matter

A big difference between attaining the typical soft money loan and a hard money loan is that you won’t need a great credit score to get it.  Bank’s can be volatile and oft-times picky, not too mention shady. So, going the route of hard money loans relieves you of worry that your credit score is not up to the standards of the bank.  

One last thing is not worrying about income as well.  You only have to prove your equity and value of your property that you are putting up as collateral.  At this point, whatever your income may be or credit score won’t come into focus and you’ll be more successful.

Straight Shooting

Applying for a loan with hard money is simple.  The loan application is not too complicated as opposed to other types of loans.  Sometimes you can get an approval in five minutes or less when you have a hard money loan.  On the other hand, when you submit a loan to the bank while getting a soft money loan it could take weeks or over a month.  Plus, the forms you have to fill out are endless and obviously annoying. Once you’ve identified a house to flip, the best way to figure out all the costs involved is to use a hard money calculator like this one. This is the easiest way to figure out how much interest you will pay, all the extra costs that you might not be aware of, and most importantly, the expected ROI.

You May Also Like