There are many financial challenges you may face when it comes to funding your land investment. Working with a private money lender in Houston can help solve many of these complexities to help you take advantage of opportunities as they arise. Loans from private lenders can offer several benefits.
Differences Between a Bank and your Private Money Lender in Houston
First, let’s look at the main difference between a traditional bank and a private money lender in Houston:
Banks are institutions that generally use funds from deposits to lend to individuals and businesses. In some cases, they may even borrow money from the federal government at lower interest rates and then use it to lend to you at higher interest rates to turn a profit.
A private lender, on the other hand, typically uses funds from individual investors to lend. Once again, interest rates are designed to offer return on their investment.
Financial institutions are subject to many different regulations at the federal, state, and local level. Often these regulations determine who they can lend to and even specific borrower profiles they can provide loans to. Much of this comes down to putting your information in a computer program. The institution often has little leeway in who they can lend to.
By contrast, your private money lender in Houston faces far fewer regulations. There are some regulations, such as controlling interest rates, but generally there’s more flexibility in who we can lend to. This offers many benefits for real estate investors who aren’t interested in traditional mortgage loans.
Some Real Estate Investing Challenges a Hard Money Loan in Houston Can Help Solve
Because there are fewer regulations, qualifying for a hard money loan in Houston is often a lot easier than qualifying for a traditional loan. Private lenders are often less interested in your financial history than traditional lenders. Instead, we focus on the specifics of the deal, such as the asset you use as collateral. Also, the local lending market also comes into play on how your loan is structured.
With private money lending in Houston, we can often customize your loan to your specific needs. For example, if you’re planning on renovating and then selling a property, then you’ll likely want a shorter loan term, or at least no prepayment penalty. By contrast, most traditional lenders focus on long-term loans and penalize you for paying it off early, as they lose out on interest payments if you do it this way.
Here are some key advantages of working with a private money lender in Houston:
- Shorter terms
- Less paperwork
- Easier qualification
- Industry-specific knowledge
- Higher loan amounts
- Faster funding
However, it’s important to keep in mind that hard money loans tend to be more expensive than traditional mortgages. However, in the short-term the cost difference tends to be less significant. Therefore, if you’re more interested in a longer-term loan and you can qualify through a traditional lender, then choosing a bank loan may be the better bet.
Family Run Private Money Lender in Houston since 1982
When you need fast lending for commercial real estate, choose our team at Texas Funding. We’ve been lending to individuals and businesses since 1982 and are here to provide you with creative lending solutions for your needs. Whether you need fast capital or your less-than-exemplary credit score is holding you back, talk to our professionals about your needs. Call us today at 1-800-833-0138 to learn more and get funding.