Hard Money Loans: Fast Financing for Real Estate Investors
Secure asset-based lending with quick approval and flexible terms for your investment property
Understanding Hard Money Loans
What is a Hard Money Loan?
A hard money loan is a short-term lending instrument that uses real property as collateral. Unlike traditional loans, hard money loans are funded by private investors or companies and focus on property value rather than the borrower's creditworthiness.
Traditional vs. Hard Money Loans
| Feature | Hard Money | Traditional |
|---|---|---|
| Approval Time | 2-7 days | 30-60 days |
| Interest Rates | 8-15% | 3-7% |
| Term Length | 6-24 months | 15-30 years |
| Credit Requirements | Flexible | Strict |
Hard Money Loan Calculator
Loan Requirements
Property Requirements
- Commercial or residential real estate
- Property value assessment required
- Clear title history
- Proper zoning for intended use
Documentation Needed
- Purchase agreement
- Proof of insurance
- Exit strategy documentation
- Recent property photos
Financial Requirements
- Down payment (typically 20-30%)
- Proof of funds for down payment
- Reserve funds for payments
- Project budget breakdown
Common Uses for Hard Money Loans
Fix and Flip
Purchase and renovate properties for resale within 6-12 months
Bridge Loans
Short-term financing while securing long-term traditional loans
Construction Projects
Fund new construction or major renovation projects
Frequently Asked Questions
What makes hard money loans different from conventional loans?
Hard money loans are asset-based loans focused on property value rather than borrower creditworthiness. They offer faster approval, more flexible terms, but typically have higher interest rates and shorter terms than conventional loans.
How quickly can I get approved for a hard money loan?
Approval typically takes 2-7 business days, with funding possible within 2 weeks. This is significantly faster than traditional loans which can take 30-60 days.
What is the maximum loan-to-value ratio available?
Most hard money lenders offer up to 65-75% LTV for residential properties and 60-70% for commercial properties. The exact ratio depends on property type, location, and project specifics.
Are there prepayment penalties?
Prepayment terms vary by lender. Some may charge a fee if the loan is paid off within the first year, while others offer no prepayment penalties.