A hard money loan refers to a type of loan that is usually secured by real estate assets. Hard money loans are considered to be loans of last resort or short-term bridge loans used during real estate transactions. The loan lender could be an individual or private or commercial company.
In a hard money loan sanction, usually, the property of the borrower is used as collateral. According to data, borrowers usually take hard money loans from various lenders in order to renovate or reconstruct a real estate property. They can also use the specific real estate property as collateral at the same time to renovate it.
However, this type of loan tends to have a higher interest rate than its traditional counterparts. The borrowers have to return the loan money within one or three years of the gap. If they delay returning the borrowed money, then they will have to pay more return money along with higher interest rates.
Benefits Of Applying For Construction Loans
You must provide extensive documents to apply for traditional loans from private or government banks. You will need to show them your documents regarding your financial situation and job prospect before you are granted loan money.
However, in the case of construction loans, you don’t need to specify such documents to the lender. Instead, the lender could be any individual or commercial company providing you with an instant loan by securing your real estate asset.
The asset could be anything; even if you want the money to renovate a particular home or real estate, you can present them as an asset to the lender. In addition, there are several benefits regarding private loans, such as:
- It is instant cash.
- It provides asset-based lending, and
- Flexible underwriting.
However, hard money lenders, who will approve your construction loan, will check your experience and credit score as a borrower before agreeing. So, you must have the real estate building or construction site in your possession if you apply for construction or hard money loans.
Top 5 Texas Hard Money Lenders
You can consider looking at these lenders’ prospects if you reside in the Texas region. The following lenders can guide you through the procedures regarding construction loan applications before granting you the desired loan money.
Catalyst Funding LLC
Catalyst Funding is a hard money construction loan lender based in Houston, Texas. They usually provide their services in the Houston area and more if licensed.
Boom Bam Funding
Boom Bam Funding is a real estate funding company that calls its borrowers Real Estate Bees. It is a revolutionary real estate cutting-edge, technologically advanced platform infused with innovative market knowledge.
They will provide you with strategies so that you dominate the targeted real estate market economy. They initiated their journey as a funding agency in 2013. Within such a short period of time, they have earned their name to be published on Business Insider, Forbes, RealTrends, and more, as a rapidly growing company.
They have dealt with a lot of real estate professionals within the span of a few years. Apart from hard money lending, they also provide digital and technological solutions.
HouseMax Funding agency provides hard money loans to urban and suburban communities in 50 states with a focus on Texas. If you apply for an instant loan from the funding agency, they will approve your loan request within just ten days.
They are direct lenders who will fund you for your venture from their own private capital. So, you can be sure that there is no requirement for third-party involvement. HouseMax funding will provide you with a construction loan within a short period of time, and you will just be paying a minimal value for the approval.
HouseMax lenders possess certain characteristics that make them unique from other lenders, such as:
- their simple qualification process,
- fast closing,
- minimal deal complexities, and
- simple leverages.
Clear lending is a funding agency that will provide you with construction loans if you are a novice in a particular business. They have a specialised structure to guide you through loan borrowing once you decide to invest in the real estate market.
Clear lending is considered the most aggressive lender that is determined to provide you with hard money loans no matter what. They are committed to delivering the products and services per the borrower’s requirements.
The company is licensed by the Texas Department of Savings and Mortgage Lending at the same time, licensed with the Nationwide Mortgage Licencing System. So you can be sure you are in good hands when borrowing construction loans.
Marline Business Loans
Marine Capital Solutions is a nationwide lender with expertise in financing small businesses in the niche of real estate. They are a committed company that takes matters seriously onto their hand.
They are more involved in community projects with the help of the Community Enrichment Guild’s wings. They also provide charitable and developmental services for the betterment of society. They will provide you with the safest environment while borrowing hard money.
The funding agencies are helpful to first-timer and committed individuals in the real estate market. However, if you are a person who is passionate about investing and growing your business, then these companies can benefit you widely.