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.