Hard Money Loan Myths Debunked

If you ask a hard money lender about the craziest myths and rumors they’ve ever heard about their line of work, you will quickly learn that we have heard it all. When it comes to hard money loans, it can be hard to separate fact from fiction.

That’s why our team of lending experts at Wilshire Quinn Capital is here to clear the air. As a leader in capital markets, we are here to shed some light on myths you might have heard about hard money loans so you can invest your money wisely going forward.

Here are the most common hard money loan myths debunked:

Myth: Hard Money Loans Are High-Risk

Some borrowers avoid hard money loans because they feel they are risky. However, this is simply not true. Most hard money lenders use their own money, therefore their own best interest is sacrificed when they approve a high-risk loan.

At Wilshire Quinn, our expert team will ensure the market is right to support the loan. Our loans will not merely look great on paper, but they will have sufficient market evidence to support them.

Myth: You Can Only Get Hard Money Loans If You’re Desperate

Because hard money loans are characteristically more lenient than conventional lenders, some people believe they are reserved for the desperate. Once again, this assumption is incorrect.

Most people who obtain hard money loans prefer them for their prompt closing times, variety, and flexible terms. For those reasons, hard money loans are desirable to many types of investors.

Myth: Hard Money Loans Are More Expensive

Hard money loans indeed appear more expensive upfront. However, because they offer shorter repayment periods and prepayment penalty times, borrowers can pay off their loans in a shorter amount of time (with less interest).

Additionally, hard money loans allow borrowers to receive a higher percentage of their project’s cause, which allows them to invest less of their own money. For these reasons, hard money loans often end up being more affordable in the long run.

Myth: Hard Money Lenders Want To Take Your Property

As industry leaders, trust us when we say that hard money lenders do not want to take your property. Most qualified hard money lenders—even the small ones—are well-established and reputable.

However, like any industry, there are going to be right and wrong lenders for you. To protect your own best interest, we recommend that you do your homework, fully understand your loan’s terms, maintain a solid exit strategy, and ensure that you’re capable of paying off your loan.

Top Hard Money Lenders in Southern California

After learning more about hard money loan myths debunked, we hope that you can knowledgeably and confidently pursue your investment goals. If you’re looking to invest in commercial or residential real estate in California, working with a hard money lender can provide you with rapid and reliable funding.

Our successful track record here at Wilshire Quinn proves that we are the premier bridge lender in Southern California. If you’re looking to purchase or refinance an investment property, contact our team today to speak with an expert.


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