Borrowers who are having trouble obtaining loans from traditional lenders often have to turn to other sources. Read more below to learn about untraditional lenders, and why borrowers are seeking alternative loan agreements.
Obtaining funding for a loan can be difficult. Factors vary for each individual, and depending on the requirements of the lender, obtaining funding isn’t always a simple process. More often than not, low credit score and a weak financial history makes for rejected loan appeals, causing borrowers to look elsewhere or cease searching.
Fortunately for borrowers serious about obtaining funding and working towards a stronger financial ground, other options are available. After being rejected by a traditional lender like a bank, borrowers often turn to commercial Texas Hard Money Lenders to obtain the funding they need.
Cons of Working with a Private Loan Investor
Private loan investors offer hard money. These lenders may be an alternative loan agency, a company, or a wealthy individual looking to make a profit. One thing to know is that not all private loan agencies are legit—and, if they are, they often have higher interest rates and the possibility of hidden fees within the loan agreement. Doing research into your commercial hard money lender is essential. There are many valid options but turning to an unreliable and predatory lender won’t help your case. Additionally, it is always a good idea to research their project history—what kinds of borrowers they have helped, and their success rate. If you fit into their category of borrowers, they are likely a great option for you. As long as you take into account the short repayment period and higher fees, it is likely you are eligible for a hard money loan and will find success obtaining funds.
Pros of Working with a Private Loan Investor
Though working with a private loan investor will require assurance, there are benefits to working with private investors. Unlike banks, they are able to approve a wider group of people because they consider the property’s collateral before they consider the borrower’s financial history. This does not mean they do not review your past finances. It just means that they are likely to approve someone with an imperfect credit score if they see value and potential profit in the loan investment. Not only are private investors able to approve more people, but they are able to approve them faster. Sometimes, the loan process can begin as soon as the day of—public lenders like banks are not able to do this. Public lenders usually need about a month to get started. The flexibility of private investors is seen in their ability to approve and their speed. Inherently, flexibility often leads to other things, like a transparent relationship and an individual experience. While hard money loans are expected to be paid on a short term time period, there is usually the ability to work with the lender and expand it, if necessary. Working with a commercial hard money lender has many benefits, and if you do your research to find a reliable local investor, it is likely you will find in them an alternative to traditional lenders.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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