Public lenders have high standards and requirements surrounding your financial history that can disqualify you from loans when you really need them. If this is the case for you, read more below to see how you can make the best of working with Texas private money lenders, so you can finance the property of your dreams.
Seeking out a loan provider can be exhausting, and the disappointment in rejections can make it easy to lose motivation. However, public lenders are not the only resources there are for loans. While your local bank or credit union may seem like an easy option, they are likely to reject people who do not have a solid credit score or a reasonable debt to income ratio. Because of this, many people are turning to private lenders.
Residential hard money lenders in Texas are private money lenders that offer speed, but, most importantly, they flexibility in their approval process, meaning they can approve more people than banks can. This means they can approve some borrowers who are being disqualified from public bank loans.
The most obvious benefit of residential hard money lenders in Texas is the opportunity to be approved with less strict requirements than public lenders. Instead of considering your financial history as top priority, they considered the collateral the most important factor. The value and potential of the home is considered before the creditworthiness of the borrower is considered. Now, the creditworthiness of the borrower is still considered, however, it is not held as highly as the factors regarding the property. Texas private money lenders can offer a type of flexibility and transparency in this way, because they will be real with you about the potential of the property.
While residential hard money lenders in Texas offer a lot to offer, it is important to know a few things that may not make them ideal for your particular loan needs. The first thing is that they have high interest rates, and they can be as much as five percent more than what is asked by other lenders on the market. Some people who need money fast can afford to lose a pretty penny, but, combined with the short repayment period, they may not be for everyone.
Particularly, lenders who offer hard money work great with builders and home renovators. Builders and renovators are usually working on a fast timeline and, with the goal to sell the property as soon as possible, with what is hopefully a significant profit, the short timeline literally lends itself to them. The high interest rates just end up being an extra cost that pays for the speed of the loan, which can be really important if they are bidding on a competitive property.
Private hard money lenders are not for everyone, and not all of them are reliable. If you choose to move forward with a private lender, be sure that you understand all the terms to the loan agreement and the terms fit your particular situation.
Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
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 and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.