Hard Money Loan Requirements
When it comes to securing a mortgage, there’s no one-size-fits-all solution. Conventional lenders, with their stringent rules and endless paperwork, may not be a viable option for everyone. In such situations, hard money loans emerge as a beacon of hope. Yet, a common misconception persists: “Can I get a hard money loan based solely on equity?” In reality, there’s more to the story. Let’s examine the truth about hard money loan requirements.
Understanding the True Nature of Hard Money Loans
A common misunderstanding is that equity is the be-all and end-all for hard money loans. Yes, hard money lenders, like us at Evoque Lending, consider equity to be an important part of the equation. However, the decision isn’t solely based on equity. There are other critical factors that come into play.
The Holistic Evaluation – Beyond Equity
Ability to Repay – Do Hard Money Loans Require Proof of Income?
Firstly, one of the main hard money loan requirements is the borrower’s ability to repay the loan. Traditional lenders often dwell on income proofs and debt-to-income ratios, but at Evoque Lending, we look beyond those norms. We examine the borrower’s overall financial health.
For instance, self-employed individuals often have high write-offs for tax purposes, reducing their income on paper. However, consistent profitability and timely mortgage payments over years depict a clear picture of their repayment ability. Moreover, bank statements showing a positive net deposit trend over 12 months can speak volumes about a client’s capacity to repay the loan.
Character – A Critical Hard Money Loan Credit Requirement
Another essential hard money loan requirement lies in assessing the borrower’s character. This assessment includes understanding the reason for the loan, the borrower’s commitment to maintaining the collateral property, and their overall credit history.
While bad credit can sometimes be linked to genuine reasons like medical emergencies, we look for signs of responsibility and commitment. Neglected homes or outstanding child support payments, unless justified, might raise red flags.
Exit Strategy – A Unique Aspect of Hard Money Loans
An often overlooked aspect of hard money loans is the borrower’s exit strategy. As these loans are usually balloon loans, we want to ensure that our clients have a solid plan to repay the loan when it matures.
Evoque Lending for Hard Money Loans in California
At Evoque Lending, we believe in empowering our clients. For those who’ve been turned down by traditional lenders, we offer a different approach that focuses on their potential and their story, not just their credit score.
That’s why we also provide free credit repair for all our clients who fund a loan with us, assisting them in enhancing their credit health. By closely monitoring their credit situation, we facilitate their journey towards refinancing into a new, long-term loan.
Breaking Down the Misconceptions About Hard Money Loans
Hard money loans are not just about having equity in your property. They involve a holistic evaluation process that considers the borrower’s ability to repay, character, and exit strategy. And that’s where Evoque Lending excels.
While hard money loans do not require an appraisal or a down payment in the traditional sense, they do require an evaluation of your overall financial health and stability. Evoque Lending is here to guide you through this process with empathy, expertise, and professionalism, empowering you to make informed financial decisions and liberate yourself from the constraints of traditional lending.
Remember, at Evoque Lending, every loan request is treated with the respect it deserves. Don’t let past credit blemishes deter you from securing a loan for your California property. Reach out to us today and let us help you pave the way to your financial liberation.