Hard Money Lenders Houston

In real estate and finance, hard money refers to a type of loan that is secured by real property. Hard money lenders are typically private individuals or companies, like King James Lending, that see value in this type of risky venture. 

Typically, hard money loans are short-term loans lasting from one to five years. The loan amount is primarily based on the value of the property being used as collateral, not on the borrower’s creditworthiness.

Yes, while there is overlap, there is a distinction between hard money lenders and private lenders. These terms are often used in the context of real estate investing.

A hard money lender is a type of private lender that uses the property itself as collateral for the loan. They typically offer short-term loans. Hard money lenders are usually focused on the value of the property as opposed to the borrower’s credit. Often, these loans are often used by real estate investors who need quick funding for an investment property, especially for fix-and-flip projects or when the borrower can’t qualify for a conventional loan.

A private lender, on the other hand, is a non-institutional individual or company that loans money. While hard money lenders fall under this category, not all private lenders are hard money lenders. Some private lenders might lend money based on a relationship with the borrower, the borrower’s financial situation, business plans, or other factors, rather than primarily on the property’s value.

A hard money loan is a type of short-term loan that’s secured by real property and issued by private investors or companies, known as hard money lenders. These loans are typically used in real estate transactions. 

They are based primarily on the value of the property, rather than the borrower’s credit score or income verification, as is common with traditional lenders.

Private money loans are typically reserved for real estate investors who need quick access to funds to capitalize on an opportunity. While traditional lenders offer alternatives to hard money loans, the loan term is quite different. 

A mortgage for an owner-occupied home might have a loan term of 30 years or more. However, an REI’s timeline is much shorter and carries higher risk. As such, the loan terms account for that with a higher down payment or a higher interest rate. Generally, these are not long-term loans, so there’s no need for it to last several decades. 

Unlike a bank or family member, private lenders can offer more flexible loan solutions so that you don’t have to rely on a great credit score or credit history. While both might use a loan-to-value (LTV) ratio, the end result is vastly different. This flexibility is why so many REIs like working with a private lender in their community. 

With private real estate loans, you can take advantage of more opportunities, cover closing costs, and build out your portfolio. To learn more about how to make a hard money loan work for you, contact the team at King James Lending for a quick consultation!