The video, “How Hard Money Loans Works,” defines hard money loans. Hard money loans are financing options that offer alternative methods of funding. They include using the equity in a property to provide funds. One benefit of hard money loans is the ability to buy properties without significant amounts of cash on hand.
A common misconception of a hard money loan is that people solely use them to fund real estate. You can indeed use hard money loans to purchase other types of assets. For instance, you can use them for investment properties, automobiles, or personal property. Still, these types of loans are not specifically designed for this acquisition.
The primary purpose behind hard money loans is to provide funds to acquire real estate using only your equity in the subject property. Hard money loans can be an excellent source of capital for real estate investors or purchasing properties. There are many ways that you can obtain these types of funds without having to resort to an unconventional source.
You can inquire about several hard money loans if you need to finance a real estate purchase. Some financing options include traditional bank loans, home equity lines of credit (HELOCs), cash-out refinances, and hard money loans. These alternative sources are typically available through a lender.