In what situation might a borrower consider a hard money loan?

A borrower might consider a hard money loan primarily in the context of needing immediate financing for a real estate investment. Hard money loans are typically provided by private lenders and are secured by real estate. They are often used when traditional financing options take too long or are not available, particularly for investment purposes such as flipping properties or acquiring distressed properties quickly.

These loans are generally easier and quicker to obtain than conventional loans because they focus on the value of the collateral (the property itself) rather than the borrower's creditworthiness. This makes them appealing for investors looking to seize time-sensitive opportunities in real estate markets.

In contrast, options such as purchasing a primary residence with a low credit score, seeking the best interest rates, or refinancing existing loans would typically not align with the purpose or benefits of hard money loans, as these situations generally require more favorable terms and longer financing durations that hard money loans do not provide.