The COVID-19 global pandemic has greatly impacted housing markets and has also altered the mortgage lending industry. There are more houses sitting on the market, with less people able to buy them, because of the widespread economic impacts.
For real estate investors, this rare combination has made for an excellent time to invest in fix-and-flip properties, because there is an abundance of properties for sale, which can be great deals.
In order to finance these purchases, many investors turn to hard money loans. The question today is: have hard money lending requirements changed during COVID-19?
Hard Money Bankers, a full service and self-funded money lending company, is weighing in on the conversation, and breaking down if hard money lending requirements changed during COVID-19.
Why choose a hard money loan?
Before diving into if lending requirements have changed during COVID-19, it’s important to understand why choosing a hard money loan may be beneficial. According to Hard Money Bankers, one of the biggest benefits of hard money loans is that they can be quick and are sometimes approved in less than 48 hours.
This can be a huge benefit if you’re looking to move quickly on a property. Credit scores aren’t a make-or-break determining factor, unlike traditional loans. Hard Money Loans may make sense in scenarios where traditional loans are not a feasible option.
What kinds of investments are hard money loans suitable for?
According to Hard Money Bankers, hard money loans can be suitable for a wide range of investments, but they’re best suitable for investments with quick turnarounds. They’re especially suitable for fix-and-flip properties, where an investor purchases a property which needs rehab, fixes it up, and sells it for an increased price.
Hard money loans can come in quickly, meaning you’ll have the cash in hand necessary to accomplish these goals. Plus, if you’re looking to flip your first home, Hard Money Bankers recently shared four things all investors should know before their first fix-and-flip.
Have hard money loan requirements changed?
Conventional lending options have shifted slightly due to the COVID-19 pandemic, because lenders are more wary of giving to borrowers with lower credit scores. Hard Money Loans have proven to be an excellent option for lenders during this time, as the global economy has been impacted in unprecedented ways, real estate investors had to adapt to new financial situations.
Some hard money lenders may be looking for reassurance that borrowers can weather economic hardships, and that may especially be the case with new borrowers. But either way, Hard Money Bankers says that hard money loans are an excellent option to pursue, if you’re looking to fill a borrowing gap, or finance a quick investment, such as a fix-and-flip.
First time investors can still have luck with hard money loans, and it all depends on your individual finances, and what you’re looking to invest in.