Faq’s
Hard money refers to short-term loans secured by real estate. Unlike traditional mortgages, hard money lenders focus on the property’s value rather than the borrower’s creditworthiness.
Hard money lenders assess the property’s after-repair value (ARV) and lend based on that projection. The loan term is typically shorter, and interest rates are higher than traditional loans.
Real estate investors, house flippers, and property developers often use hard money loans for quick financing, especially when traditional banks are not an option.
Loan-to-value (LTV) ratios vary, but lenders may offer up to 70% of the property’s ARV. Loan terms are usually 6 months to 3 years.
Hard money lenders finance various property types, including residential, commercial, and land. Some specialize in specific niches.
Hard money lenders focus less on credit scores and more on the property’s potential. However, bankruptcies or judgments may still affect eligibility.
Hard money loans can fund within days, making them ideal for time-sensitive real estate deals.
Hard money lenders may foreclose on the property to recoup their investment. They base their decision on the property’s future value, not its current state.
Expect origination fees, interest, and possibly prepayment penalties. Always clarify the fee structure upfront.
Research local lenders, read reviews, and ask for referrals from other investors.
Frequently Asked Questions
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How do I find reputable hard money lenders?
Research local lenders, read reviews, and ask for referrals from other investors.
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What fees are associated with hard money loans?
Expect origination fees, interest, and possibly prepayment penalties. Always clarify the fee structure upfront.
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What happens if I can’t repay the loan?
Hard money lenders may foreclose on the property to recoup their investment. They base their decision on the property’s future value, not its current state.
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How quickly can I get a hard money loan?
Hard money loans can fund within days, making them ideal for time-sensitive real estate deals.
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What credit score is needed for a hard money loan?
Hard money lenders focus less on credit scores and more on the property’s potential. However, bankruptcies or judgments may still affect eligibility.
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What types of properties qualify for hard money loans?
Hard money lenders finance various property types, including residential, commercial, and land. Some specialize in specific niches.
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What are the typical terms of a hard money loan?
Loan-to-value (LTV) ratios vary, but lenders may offer up to 70% of the property’s ARV. Loan terms are usually 6 months to 3 years.
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Who uses hard money loans?
Real estate investors, house flippers, and property developers often use hard money loans for quick financing, especially when traditional banks are not an option.
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How do hard money loans work?
Hard money lenders assess the property’s after-repair value (ARV) and lend based on that projection. The loan term is typically shorter, and interest rates are higher than traditional loans.
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What is hard money?
Hard money refers to short-term loans secured by real estate. Unlike traditional mortgages, hard money lenders focus on the property’s value rather than the borrower’s creditworthiness.