Hard Money Lending is a special asset-based loan financing through which a borrower gets funds secured by real property. Private investors or companies regularly give hard money loans. Interest rates are periodically higher than residential property or conventional commercial loans due to the higher risk and shorter loan duration.

What credit score is needed for a Hard Money Loan?

On average, borrowers need the lowest credit score of 600 for hard money loans. Comparing the credit score to the standard 680 – 700 credit score traditional lenders request makes it easy to see why hard money loans are an incredible choice.

If you intend to buy a property, hold it, and rent it out, you might find the lowest credit score requirements are a bit higher, usually around 680, just because the risk is higher. You keep the home for a more extended period and are answerable for the payments even without renters, so lenders would require a little more assurance that you can make all your payments.

Does Hard Money lending affect credit scores?

Hard money lenders are likewise not set up to report to Equifax, Experian, and TransUnion, the three credit bureaus. Frequently, a hard money lender is a private individual who works directly with the borrower or through a hard money mortgage broker to make a small number of loans to local real estate investors each year.

Continue:https://eodvn.com/hard-money-lending/