Your credit score is one of the most important factors that lenders look at when you’re applying for a traditional loan from a bank, but it is not the main consideration when borrowing from LJC Financial. We are an asset-based lender, meaning that the value of your property and your ability to repay the loan are much more important to us than your credit score.

If you’re fixing and flipping property in Houston, we can provide you with the hard money loan you need without doing a credit check. Contact us today to learn more!

Will my Credit Score Affect a Hard Money Loan?

LJC Does Not Check Your Credit

The short answer is no. There are different factors when calculating your credit score and LJC rarely uses credit scores as an instrument when considering a potential loan.

LJC Financial offers hard money loans without conducting a credit check on the borrower. We believe that your credit score does not always tell the whole story and therefore, should not be the only factor considered when approving loans. The value of your property, the location of the property, and your ability to repay the loan are much more important factors to us.

Why do Traditional Lenders Look at Credit Scores for a Loan?

Traditional lending institutions usually run a credit check to understand the borrower’s ability to repay the loan. Most borrowers with a low credit score are viewed as an unnecessary liability and it can be difficult to get a loan.

For a traditional mortgage, for example, your credit score is one indicator of whether you will make on-time payments or not.

What are the terms of a hard money loan?

Typically the terms are based on your credit score along with the assets that you provide when seeking out a loan. On average rate, we tend to see around 5.25% APR on a 12-month loan. However, the rate is also heavily influenced by the federal reserve which determines how expensive money can be lent out to borrowers in the marketplace.

Do hard money loans show up on my credit report?

Like any loan, hard money loans will show up on your credit report or will be reported to the three major credit rating agencies, TransUnion, Equifax, and Experian. The credit report will show the hard money loan as an installment loan and will list the outstanding balance, monthly payments, and payment history. If you make your payments on time, it will reflect positively on your credit score.

Do hard money lenders look at DTI?

When LJC Financial does not generally assess creditworthiness. This is in contrast to traditional lenders that may consider a borrower’s debt-to-income ratio (DTI), which measures how well you have managed your financial obligations.

How do you pay off a hard money loan?

You usually pay the loan with a checking account that will be charged every month or however the pay periods are agreed upon. Failure to pay the loan usually means we control the secure asset that was used to the secured or will be escalated in other ways.

What other Factors Does LJC Look at for a Hard Money Loan?

In addition to the value of the property being used as collateral, we also look at:

  • The After Repaired Value (ARV)
  • Your experience
  • The amount of renovation needed
  • Your business plan

These are all important factors that help us understand your risks and chances for success when taking out a hard money loan. LJC Financial offers hard money loans without a credit check because we understand that credit scores don’t always tell the whole story. We evaluate each case on its own merits, taking into account the value of the property, the location of the property, and your ability to repay the loan.

If you’re interested in fixing and flipping houses in Houston, we may be able to help you get the funding you need. Contact us today to learn more about our hard money loans.