hard money loans

What is a hard money loan?

Hard money loans are sought when a borrower is anticipating a large profit from a real estate transaction or realizing a large savings in a short amount of time.

Hard Money loans are best for:

  • Property flippers
  • Buyers with poor credit
  • Buyers with little to no credit
  • Real estate investors
  • Property developers

The borrower uses the property as collateral and private business investors or funding groups mitigate their risk on the loan by the LTV (loan to value ratio).  

How long do hard money loans take?

A hard money loan is a short term real estate secured loan that is funded generally by private investors instead of conventional lenders.  Terms are usually between 12-36 months.

Do hard money loans require a down payment?

Lenders vary in their risk tolerance and requirements, but you will find that many of them do require a down payment of 20-30%.

What are the costs of hard money loans?

Lenders often simplify their fees by charging points instead of detailing separate fees for parts of the transaction process or in addition to other fees.  The amount charged for a loan varies based upon the transaction, agreements made, loan-to-value ration (LTV) and the overall complexity of the deal.  

Do hard money lenders check personal credit?

Yes, personal credit is checked, but credit scores are not the only decision factor.  This check is for bankruptcies, foreclosures, or collections, which can indicate ability to repay.  Hard money loans are more collateral and scenario based.

How do I apply for a hard money loan?

Hard money is not for every person's risk tolerance.  There are other options that provide longer terms to pay back the loan which may provide a better risk picture for the borrower.  Lioness Enterprises, LLC will help you find the best scenario for you.