With interest rates for home loans so incredibly low, why would anyone need to use a hard money loan to buy real estate?

The reality is, if you or your clients are looking to buy real estate for investment purposes, chances are you will not be able to use bank financing. Banks are still swamped with consumer home loan purchases and refinances. To be frank, many financial institutions don’t need the additional business in the short term. ESecond, even if a traditional lender will make a loan to help you or your client buy investment property, they take too long!

Real estate investors don’t have 45-60 days to close a deal. The deals go to those who can close quickly – oftentimes in 10 business days. That’s where hard money comes in.

A hard money loan broker specializes in helping real estate investors acquire property fast. At Pacific, we typically fund in 5-10 business days. Also, hard money loan broker have the option to waive things like appraisals and reports on the property, and underwriting guidelines for borrowers are fairly liberal. Most of us are not FICO driven.

Hard money rates can be high, but these loans provide so many benefits that traditional ones can’t.

Traditional and Hard Money Loan Interest Rates

Because of the many benefits of a hard money loan, hard money lending rates can be higher than those for a traditional home loan. While NerdWallet said a conventional 30-year fixed-rate mortgage had an average rate of 2.914% at the end of November 2021, hard money lending rates often sit between 8-15%, according to Rocket Mortgage.

Why do so many investors find value in this option, despite the potential for higher hard money lender rates? There are a number of reasons to use hard money to close quickly.

In today’s competitive market where inventories are tight and opportunities are fewer, a financial partner that understands the unique needs of real estate investors is a powerful asset. A good hard money loan broker can support an invaluable relationship in more ways that you might imagine. Along with that relationship, you can access all the benefits we’ve outlined above: fast approval as well as less-stringent loan requirements and underwriting guidelines.

At Pacific Private Money, we’re fast, friendly and our hard money lending rates and overall pricing are among the best available in the California hard money market. We’ve deployed over $1B in funds since 2008.

We can help you or your client get the funding needed with no headaches. Want to take the next step toward your real estate investment? Get a loan!