Getting mortgages for people with bad credit can be very tough. While credit score is only one of the three main lending criteria used by banks, it’s a very important one. while some lenders will lend to people with marginal credit, many will not, and if you have very bad credit most Nevada lenders will not offer you finance, let alone provide options for cash out refinance or equity loans.Fortunately, there are options out side of traditional lenders for those with very poor credit – Hard Money lenders.
What is Hard Money?
Hard Money lending is an asset based type of loan funding. With a Hard Money Loan, the loan must be secured against a stable asset, typically a piece of real estate. A hard money loan uses the Equity in the asset as the main criteria of the loan, credit score is largely irrelevant as the lender ensures that there is sufficient equity available to cover the debt in the event of a default.
Normally, a Hard Money loan can only be for a maximum of around 70% of the value of an asset, and interest rates are usually significantly higher than other types of loan. These types of loan are often offered by private investors. while a Hard Money loan may not be ideal in many cases it can aslo be a great option for people who would otherwise have no way to buy a home.