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Speed of Hard Money Lender Denver Loans vs. Conventional Financing


November 15, 2017

When deciding to purchase a property or make a committed investment into real estate or a commercial property, the financing behind a buyer is obviously an important feature. In order to move forward and successfully complete the transaction, financing specifics must be correctly finalized and legitimately upheld for everyone involved in the buying or selling process. These meetings and agreements between buyers, lenders, banks, sellers, and others can be time consuming which can have drawbacks when needing to secure funds as quickly as possible.

For those in need of seemingly immediate financing, hard money loans can serve as a beneficial component making certain the property changes ownership within a specified and commensurate timeframe. Unlike conventional loans, typically financed through a bank or commercial lending organization, these hard money (or private money) loans can often be completed within a relatively short time frame.

On average, it takes approximately 42 business days to close a mortgage or almost two full calendar months. For sellers, individuals, or companies looking to close in a hurry this timeframe is often inconceivable and cause for concern. For those reasons, other opportunities exist in order to allow individuals various options for closing more quickly within a shorter time period. When hard money is utilized as a replacement, the closing date can be shortened to within a week or five to seven business days in most cases.

Various reasons exists for the month-plus extended waiting time of funds approval from a conventional loan, including but not limited to the following factors:
  • Rate locks allocated for such transactions typically are firm lasting for 30, 45, or 60 days and lenders are cutting in areas specific to their workload in an effort to accommodate for potential future rising rates
  • Rising rental prices have influenced many to purchase properties which can often be borrowed and payments made for less than their current rent, in addition, property owners then have equity invested in their specific location instead of garnering nothing in return upon departure
  • Current demand for funding is more commonly exceeding most traditional bank’s abilities to keep up with all of the added transactions and approvals despite newer technology
Also, added implementation of the TILA-RESPA Integrated Disclosure Laws (TRID) requires a 72-hour period of paperwork attainment and any future changes to the originally submitted document will follow suit with any additional delay. These fairly recent government instituted time lapses are now required on all closed banking loans.

For each of these above stated reasons the delay behind a conventional loan can be detrimental depending on the type of property being purchased and willingness or readiness of a seller to complete the specified transaction. Further, on many occurrences the buyer wishes to close immediately in order to necessitate their corresponding move or coordinate a transition faster for potential business or personal reasons.

Hard money allows for a much faster timeframe for individuals to get from a deal to actual payment, occupancy, or ownership. These lenders can assist in the same method as traditional or conventional loans but operate under a different precedent and an entirely different timeframe. By utilizing a hard money loan the time for closing can be dramatically reduced when compared with traditional banks and their current regulations allowing for multiple delays in the process. Where bank loans on average are taking a month or two, possibly more, to finalize, the use of hard money can bring closure to a transaction within three consecutive days and more readily in under a week’s time.

Just as various factors contribute to the delay in processing for traditional loans as outlined above, hard money’s speed is based on a number of counter attributes which can be extremely beneficial to all parties involved in the transaction. These include various aspects but still include numerous parties and moving parts for hard money loan funding and closing.

Borrowers, sellers, the hard money lenders, potential real estate agents, in addition to the outside title and escrow companies can all potentially be involved in the deal process. The coordination needed among all of these is essential in speeding up the determination for funding. Allowing wired funds transfers and a concerted effort to speed up the process creates opportunities for most funding to occur within a relatively short time frame. Three days following official signatures and paperwork completion are required prior to the disbursement for any of the acquired funds.

Unlike the three day waiting period instituted by banks and the government associated with a conventional loan, which can be added with any further changes, the hard money lender is executed in three days following the signing to when funds are received and accepted. A short-term, beneficial, and speedy alternative to the delays and unfortunate tardiness of traditional bank loans.

The distinctive time difference is a critical component of hard money loans and a significant benefit relative to an individual’s situation. When considering a hard money loan vs mortgages traditionally executed by a bank, the advantages are tremendous. Especially when dealing with an individual or multiple people who wish to close the transaction and sale quickly.

Come see the experts at COHI Capital Private Equity Lending who can help you determine your needs and set up a beneficial plan immediately. Avoid the traditional factors and delays associated with banks and their funding methods by utilizing the numerous benefits of a personalized hard money loan today. Their hard money lending options will allow you to close within a timely manner when facing specific deadlines or dealing with a party in the interest of closing quickly. They will decide what type of loan will work best for you after finding successful funding needs in over a decade of tremendous service. A full detailed review of your situation can be completed in addition to resolution issues and monetary considerations. Request some additional information by contacting COHI today. Call 970-922-3277 or contact us for a decision. Often these are made the same day and can be addressed depending on client needs and schedule.