Find Out What’s a Myth & What’s the Real Deal with Hard Money

Hard money loans can offer an efficient, convenient funding alternative to conventional loans. In fact, in some situations, hard money loans can be a better option than a traditional loan, giving investors the fast financing they need when a deal depends on it.

All too often, though, the myths about hard money loans can prevent investors from pursuing them. To help you determine if these loans may be right for you, here’s a look at the facts behind some common myths about hard money loans.

4 Myths About Hard Money Debunked

Myth 1: Only borrowers with bad credit take out hard money loans.

This is false. While bad credit can be one reason borrowers turn to hard money loans, it’s not the only reason. In fact, borrowers may also seek hard money loans if or when:

  • They don’t qualify for traditional loans for reasons other than poor credit:

    For example, a self-employed individual may have earned inconsistent income over the past years, and that can make traditional lenders unwilling to provide financing.

  • They can’t wait for a traditional loan:

    For deals like short sales or real estate purchases at auctions, investors may need financing quickly, like within 48 hours to a week. Since conventional loans take much longer to fund, hard money loans can be a far better option in these situations.

Myth 2: Hard money only focuses on deals with high loan-to-value ratios.

This is also not always the case. Hard money lenders generally fund a certain percentage of the property’s value while requiring a certain cushion of equity. At COHI Capital, we fund hard money loans at up to 70% of the property’s value, with loan amounts ranging from $50,000 to $3,000,000.

Myth 3: There is little to no due diligence done with hard money loans.

Again, this is false. With hard money loans, due diligence is simply different from what’s done for conventional loans. In the case of hard money loans, the due diligence is done for the property, not the investor.

So, instead of reviewing an investor’s credit score and income history, for example, the due diligence for a hard money loan would involve looking at the property and its title to determine its value.

Myth 4: Hard money loans are small-balance loans.

Again, this is not always true. Hard money loans are funded by private lenders. That means the limits for these loans are set by individual lenders, not regulators. Consequently, hard money loans can offer more flexibility, giving lenders and investors more leeway when it comes to loan terms and amounts.

Contact COHI Capital to Find Out More About Our Hard Money Loans for Colorado Properties

COHI Capital is a premier direct lender in Colorado. For more than a decade, we have been funding short-term real estate loans for commercial and residential properties across the state. Our hard money loans are available for commercial properties, investment properties, secondary residential properties, and land loans.

Call 970-922-3277 or email us now for more information about our hard money loans for Colorado properties.

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Disclaimer:We do not make consumer loans or loans primarily for personal, family, or household use.

With a streamlined application process and responses within one business day, COHI is the lender you can trust for fast, flexible, efficient lending solutions, backed by honesty, transparency, and fair pricing.

From offices based in Denver, CO, COHI funds Colorado real estate loans for properties throughout the Denver metro area, the Front Range, the I-70 Corridor, and beyond.

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