You might come across some people who recommend hard money loans over conventional ones. And then there are others who do the opposite. Who is to know what’s better? Your individual situation can decide which type of loan is better for your needs. How? It is very straightforward to assess your current standing. And then, you can easily identify the type.
In this article, we will mention the exact points of difference between conventional and personal hard money loans. The language is pretty simple, so you’d not find any difficulties in grasping the correct distinction.
While we are not inclined towards any one of the types, we can undoubtedly list out where one type can be better in a specific condition. Let’s start with the differences. Remember, you can assess the suitability after each point.
The Points of Difference
Loan Approval Time
As you might guess, the loan approval time by hard money lenders in New York is lesser as compared to the conventional loan. Especially when it comes to Real estate Investors, they can take advantage of this speedy approval. Any delay in their loan approval can hinder their future growth and current profits. So, we can say that hard money loans are for on-the-go investors.
While we talk about conventional loans, it’s not very suitable for the category mentioned above. However, it is ideal for residence owners who can afford to make a trade-off between low-interest rates and better security.
In both cases, the board has to comply with the obligations posed by the lender.
Loan approval in case of high debt
People who are already burdened with high debt can never look towards conventional loans. In this case, they can only depend upon hard money lenders in NY. It’s because They do not require any credit report. It’s just for Real estate Investors who are almost sure that they’ll get their desired amount after selling a property.
Loan approval in case of bad credit
Your credit report is your credit-worthiness in the eyes of the law. You cannot get conventional loans at lower interest rates with lesser formalities if your credit report doesn’t boost your credit-worthiness. Your past repayment habits play a massive role in compiling a good credit score. However, in case of hard money lenders, you won’t have to show your credit report. It’s just the income from your real estate property that they are interested in.
So, for all those Real estate Investors, you don’t need to think about your credit report. Still, we recommend you to maintain your repayment habits for better opportunities.
Approval in case you have been denied a loan from other lenders
Now, it’s a huge downside if you are not provided with the desired amount from any of the lenders. In this case, it’s upon your convincing skills on how the lender is interested in a specific avenue. So, you can still depend on hard money lenders in NY if that’s the case.
On the other hand, in the case of conventional loans, if you have been denied the desired amount from another lender, it’s because of a universal principle. Maybe your credit report is not correct, or you have not been able to generate the required documentation.
With these four points of differences, you can certainly assess your own situation. We can conclude that while a conventional loan is still a pretty good deal, for certain investors, hard money loans are the way to go.