Scott Moize Jr.

First United Mortgage Group

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The Ultimate Guide To Hard Money Loans

June 26, 2020 by Scott Moize Jr.

The Ultimate Guide To Hard Money LoansThere are multiple types of loans out there and one of the easiest to get is called a hard money loan. On the other hand, it is also important for people to avoid being lured in by an attractive loan offer because it might be expensive. When it comes to a hard money loan, there are a few important points that people should note. These can be an essential tool for investors.

What Is A Hard Money Loan?

As a rule of thumb, most people look at a hard money loan as a tool of last resort. This is usually employed as a short-term loan or a bridge loan. This type of loan is commonly found in real estate deals.

Even though many people refer to a hard money loan as a loan of last resort, they serve a bigger purpose than this. Lots of real estate investors take out a hard money loan as part of their financing strategy, particularly if the goal is to fix the house and flip it. There are a few ways that a hard money loan will differ from a traditional loan.

How A Hard Money Loan Is Different

It is important to compare a hard money loan to a traditional loan that people get from a lender, such as a mortgage. Some of the key differences regarding a hard money loan include:

  • They are more expensive
  • The approval process is faster
  • There is more flexibility in terms of repayment
  • The requirements for approval are much lighter

In contrast, the approval process for a mortgage takes a longer time and is harder to get. On the other hand, a mortgage typically comes with a lower interest rate when compared to a hard money loan. This is what people mean when they say a hard money loan is more expensive.

Should Investors Get A Hard Money Loan?

If the goal is to buy a house and flip it quickly, it is important to get approved for loans in a short amount of time. This is where a hard money loan can be helpful. If the loan is going to be paid off quickly with the sale of the house, then the expensive interest rate isn’t as big of a deal. This is the major advantage of a hard money loan.

Filed Under: Mortgage Tagged With: Hard Money loans, Mortgage, Mortgage Options

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NMLS #595311
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CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.
THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.

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Scott Moize - NMLS# 595311
First United Mortgage Group
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