Even with all the reopening of cities across the United States, some households may find themselves stuck trying to get out of the setbacks caused by COVID-19. If you fall into this category, you may be looking at all the different options for a little extra cash right now, especially when it comes to real estate. Have you considered what a strong lender could do for you?

What is hard money loan?

Hard money loans are a form of asset-based financing. The funds a borrower receives are secured by the equity value of a property. Interest rates are higher on hard money loans compared to loans guaranteed by a financial institution. These types of loans are financed by private entities that are guaranteed by promissory notes to private investors.

It works the same way as any other loan. You continue to make monthly principal and interest payments on the amount you borrow. You will have a repayment term that you must stick to, like any traditional loan.

Facts about hard money loans

Here are some of the features that are indicative of hard money loans:

• These loans are protected by brokers
• Residential and commercial loans
• declared loans
• Terms can vary from 11 months to 5 years.
• one^St.two^n/aand 3^dr position in all properties
• No withdrawal restrictions
• Past bankruptcy, short sales and foreclosures are okay
• Amortized and interest-only programs
• loans can be approved within six to 24 hours

Get approved for the loan

This type of loan requires that you have equity in a property. Once a lender analyzes the equity in the property, the normal loan process will begin. The amount you will borrow will be determined by the amount of equity, ability to pay, rate of debt, and your long-term goals with the property.

Your lender should advise you on all the fine details of the deal, such as interest rate, prepayment penalty, terms, cost, title issues, among other important loan details.

Check with a local lender to see what your options are and how a hard money loan can help you with your COVID-19 issues.

How a hard money loan can help in times of COVID-19

If you have a property with equity, you may be able to use it to get a loan. During COVID-19, especially when it was at its height, you may have struggled to manage all of your bills. If you’re having trouble getting a loan and need extra money to get by during this pandemic, you may want to explore loans and see if you qualify.