A hard money loan is a short-term loan secured by real estate. Those acquiring this type of loan will typically do so with a private investor rather than a bank or credit union. That’s a primary difference between this type of loan and a conventional loan. There are a few things that you should know about the different types of lenders and how it applies to the real estate you plan on using. Here are some things that you should know about hard money loans in Dallas.
Use Any Type of Property
One of the advantages of a hard money loan is that you can secure your loan using almost any type of property. This includes a single-family residence, a multi-family residence, commercial, land, and industrial property. Some people might think that they are unable to use their property because it’s not a residential property but this doesn’t have to be the case. It might mean that you have to look around to find the right lender to borrow from but there is likely one that will deal with your type of property.
The lender that you choose for your property might depend on the type of property you plan on using. Certain lenders have experience in specific types of property and they might try to stay away from those in which they have little or no experience. Some people might mistakenly think that because a lender prefers not to use their type of property, using it is not possible. In fact, many lenders simply prefer to specialize in a specific type of property. Before choosing a lender to work with, you should ask what type of property they prefer to use. If they’re not comfortable with your type of property, you can continue looking until you find one that is. Eventually, you’ll find the right lender.
Many Lenders Won’t Lend to Owner-Occupied Properties
When using a piece of property for a hard money loan, it’s important to ask beforehand if they will lend on an owner-occupied residential property. Many lenders refuse to do this due to the various rules and regulations that accompany such a transaction. However, there are some lenders that will go through the paperwork with the borrower should you choose this route. It will be easier to find a loan if the property is unoccupied but, if you must use an occupied property, ask beforehand if the loaner is willing to loan on such a property.
Looking for a hard money loan without first considering certain aspects of the loaner or property could result in wasted time. These are a few things to know when looking for hard money loans in Dallas.