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A hard money loan is a short-term financing option secured by real estate. It’s often used by real estate investors who need quick access to funds and is typically provided by private lenders instead of traditional banks.

Hard money loans are ideal for real estate investors needing fast, flexible financing. They’re particularly useful for purchasing properties, funding renovations, or refinancing quickly.

These loans generally have terms ranging from 3 to 12 months, though some lenders might offer terms extending up to 2-3 years.

Interest rates for hard money loans tend to be higher than those for conventional loans, typically between 7% and 15%, depending on the lender and the specific deal.

Most hard money lenders will lend up to 65-75% of the property’s value, though some might be willing to go higher in certain situations.

The approval and funding process for hard money loans is usually much quicker than traditional loans, often taking just 24-72 hours.

While requirements can vary, you’ll usually need to provide a loan application, details about the property, and proof of funds for the down payment. Unlike traditional loans, credit reports and income verification are often less critical.

Many hard money lenders focus more on the value of the property and your plan for repayment rather than your credit score. However, some may have minimum credit score or net worth requirements.

This depends on the lender, but many will finance both residential and commercial properties. Some lenders may specialize in specific types of properties.

You can locate reputable hard money lenders through online searches, real estate investor networks, mortgage brokers, or referrals from other real estate professionals.