Provided by private investors or companies, hard money loans are short-term loans that are issued on the basis of the value of real estate properties. While issuing these loans, the value of the collateral property is given more importance than the financial capability of the borrower to make debt payments.  The interest rates for hard money loans are generally higher than conventional loans owing to the simple reason that there are higher risks involved for the lenders in providing these loans. This is because they do not follow normal credit guidelines while issuing these loans such as checking the borrower's income, credit records or assets. Even a poor credit history that includes bankruptcy, insolvency, arrears, missed payments etc. does not prohibit you from obtaining these loans.

Hard money loans can be excellent option to cater to your real estate loan requirements. However, it is important that you are well aware of the procedures needed to be followed for applying for these loans. The right procedures help you to convince the lenders to invest on your real estate property. Let us discuss in this article some of the significant procedures:

• These loans are obtained for purchasing or remodeling a real estate property. Hence, it is extremely important that you find the right property that's located in a good neighbourhood and is priced appropriately. You should always keep in mind that the lenders are keener on investing on a property that's priced and located suitably making them a safe investment.
• It is important for you to plan methodically and arrange for an appropriate exit plan before applying for these loans. Owing to the fact that hard money loans are short-term loans that usually last for a period of 1-2 years, lenders often want to make sure that you have a good exit plan such as selling off the property or arrange for refinancing before the lapse of the term. A good exit plan helps you in convincing the lender that your property is a safe investment for them.
• Although hard money in Texas is issued mainly on the basis of the collateral property, sometimes the lenders might want to enquire about your income, assets and credit history. It is therefore advisable to be prepared with all necessary documents.
• When you trying to obtain these loans for remodeling or repairing a real estate property, it might be a wise idea to consult a contractor and get a detailed estimate from him regarding the repairs needed and the expensed involved. With such detailed information, lenders feel more interested to invest on your project.
• A lender might be reluctant to provide you loans if he realizes that you are financially distressed. It would work in your favour if you can portray cash on hand, valuable assets in possession, a good credit history etc. These factors certainly help the lenders in getting interested to invest in your project.

Last, but not the least, you must make every effort to convince your lenders that you are in real need for this money. You must make follow-up calls and provide all the information they ask for on time. Hard money lenders are more interested to provide loans to borrowers who are actually interested to obtain the loans.