It is common knowledge that people with poor credit histories would find it very difficult if not impossible to qualify for a mortgage loan. Fortunately, hard money lenders do not care about credit scores and individuals who cannot qualify for a home mortgage may use them as temporary source of funds to purchase a home until such time that their credit standings have improved. Hard money loans may also be used in combination with traditional loans when the latter type is not able to provide sufficient funds for the purchase. Of course, borrowers need to take into account the higher interest rates used for the non-conventional loans, plus other charges, including possible pre-payment penalties. This can be justified by the higher risks that such lenders are willing to take. Meanwhile, the higher charges may be considered by the borrower as the price of having an alternative source of funds when the traditional loans are not available or insufficient.
