There are a few reasons why people may use hard money loans:
Fast funding: Hard money lenders may be able to approve and fund a loan more quickly than traditional lenders, which can be beneficial for individuals or businesses that need to act quickly on a real estate opportunity.
Flexibility: Hard money lenders may be more flexible with loan terms and may be willing to work with borrowers to create a customized repayment plan.
Alternative credit criteria: Hard money lenders may be more willing to lend to borrowers who have less-than-perfect credit or who are self-employed, as they are primarily concerned with the value of the collateral being used to secure the loan.
Short-term financing: Hard money loans are often used for short-term financing, such as flipping houses or rehabilitating properties, where the borrower intends to sell the property quickly. Traditional loans are typically geared towards long-term homeownership, which may not be suitable for borrowers with a shorter-term focus.
It's important to note that hard money loans can be more expensive than traditional financing options and may not be suitable for everyone. It's always a good idea to carefully consider your options and weigh the pros and cons before committing to a hard money loan.