Have a question about how Hard Money Loans work and what is involved? The world of hard money lenders and hard money loans comes with a lot of terminology that is not clear to everyone. Here we will try to explain most terms and most commonly asked Hard Money Loans questions. If you still have questions, please contact us so that we can help you.
There are many definitions of a hard money loan, but one of the most common one is that it is a loan that is secured by a “hard asset”. A hard asset is a tangible asset that can be sold or traded on an open market. Hard money is also called a rehab loan and sometimes a bridge loan and it is mostly funded by private parties that are called hard money lenders or private equity lenders. Mostly hard money loans are used by investors to fix and flip homes, but also to fix and rent them out. Other customers are builders who do speculative building using hard money loans. Mostly the hard money loans are short term but now hard lenders also offering 30 year fixed hard money loans for the investor who wants to grow a large rental portfolio. When applying for a hard money loan the lenders often look much more at the deal at the table, sometimes ONLY at the deal and not on your credit scores.
Primarily because a hard money loan also called hard loan or bridge loan or private equity loan, is because it is backed by a hard asset that the lender is using as collateral. Some people believe it is because that it was loans given to people in hard situations in life, but that is not the case.
Hard money lenders or private equity lenders are are lending companies, or individuals, that offers a type of collateral backed loan. Mostly a hard money lender tend to lend short-term capital that is also known as a bridge loan, to provide funding or cash, that is mostly based on the value of the collateral in place. All kinds of assets can be used as collateral for a hard money loan but mostly it is real estate that is backing hard money loans. The hard lender is focusing on the value of the asset more than the borrowers FICA scores and income. Hard money loans are not regulated like regular bank loans and mortgages why the hard money lenders can closer much faster, but charge a little more because of they do not do credit checks and conform to normal lending standards. There are commercial and residential hard money lenders and the lenders who does residential hard loans must be licenced through the NMLS (National Mortgage Licensing System) and they must have their NMLS License on the loan documents.
You do not have to pre-qualify, but if it will help you close the deal faster and it will enable you to get better traction when you are putting in offers on good deals, why it is always wise to get pre-qualified. It is easy and relatively fast, very fast compared to a regular mortgage in fact.
We offer some of the most straightforward term in the hard money industry and one of our core principles is that we do not charge any junk fees at all. For specifics, please see each loan type for your lending area.
Normally, if we have all documents and they are signed correctly, we can close your hard loan in just five days. However, it vary from loan program to loan program. Ask your loan specialist for details.
No. We only provide financing for investment properties. This means that the borrower cannot live on the property at any time during the course of the loan.
Yes, you can get pre-approved for our hard money loans and rental financing on our website. It takes 24 hours or less.
If you have a low credit score, we may still fund your loan. Our primary funding criteria is based on the equity in the real estate.
Soon! Please, let us know which area/s you would like to see our hard money loan programs in!
We only lend on residential investment properties.