What Are the Advantages of Taking Out a Loan from Private Lenders?

Private money loans are usually provided by non-institutional private investors or lenders, commonly called hard-money lenders, who are willing to loan money to borrowers for the purchase of a specific property. Here are the main advantages of taking out a loan from a private lender:

• Lower Requirements for Qualification. Private lenders can require a minimum credit score of only 550; this is lower than the minimum required by institutional lenders.

• Availability of Rehab Financing. Private lenders may also provide rehab financing. Rehab financing allows you to purchase and pay for renovations on a home using the value of a single loan. Conventional mortgages commonly require the property be in good condition prior to granting a loan.

• Fast Approval. Private lenders may approve and issue your new loan in just a few days. The process of qualifying for hard money loans is quick, and you can receive money after 10-15 days.