Banks can take weeks to approve your loan and fund it. This delay can be an issue, especially if your project is time sensitive. You can work with private money lenders to avoid putting your project on hold or extending your buying process. At Val-Chris Investments, we believe in smooth and swift transactions that allow you to achieve your dream. Here are five reasons why hard money loans close faster than other loans.
Lenders Fund Loans Quicker
People seek hard loans primarily because lenders tend to fund the loan quicker than banks. Banks are stricter when lending money out because they consider depositors’ money their own. Banks will charge depositors for handling their money and are very strict with where it goes. Meanwhile, hard money loans can approve and fund your business venture within the next business day.
Hard Money Loans Have Shorter Applications
Hard money loan applications are less extensive than bank loan applications. When applying for a bank loan, they will require you to bring proof of income and assets, employment verification, and a credit history report. After giving them your personal financial information, they will review it to evaluate how much of a risk the loan may be.
The bank may deny your application if your financial documents don’t show desirable results. However, with hard money loans, you must only show the assets in question. For example, you should show your property portfolio if you need funding to flip homes.
No Pre-Approval Needed
Hard money lenders are often more likely to approve your loan than a traditional bank. If you’re seeking to purchase an investment property, the hard money broker may approve you for how much the property is worth. If you invest in a home worth over $200,000, you can seek approval for $200,000. Unlike traditional banking, you won’t need pre-approval to obtain the loan.
Hard Money Loans Have More Flexibility
Hard money lenders evaluate every case individually. Traditional banks are subject to more strict regulations and guidelines—meaning there’s no bending those seeking a loan. However, we will make some exceptions at Val-Chris Investments and give you more financial options to meet your goals.
Relationship With Your Lender
Your relationship with your lender can make a difference. Another reason hard money loans close faster than others is that some people establish relationships with their lenders. If your lender thinks your business is an excellent opportunity for both of you to make money, they are more likely to approve your loan. Creating a relationship with a lender can save you time and allow for higher loans.