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How to Get Approved For A Hard Money Loan?

How do you get approved for a hard money? Is it similar to getting a traditional bank loan? Do you need a high credit score?

In this article, we review how to get approved for a hard money loan.

What Is a Hard Money Loan?

Hard money loans are short-term real estate loans.

Traditional lenders check your income and credit to determine your ability to repay the loan. It can take several months to get approved.

Traditional bank financing takes longer to secure and is harder to qualify for. Traditional loans are not the only option when looking for a real estate loan.

Investors prefer hard money loans because they can have the funds in a matter of days. This is a strong advantage that helps them close their real estate transaction.

When Would You Get a Hard Money Loan?

Investors look to hard money loans when they need to close quickly on the following properties:

  • Value-add or rehab properties
  • Multi-family properties
  • Commercial properties like retail centers and office buildings

When traditional banks are not an option, and a borrower needs access to capital quickly, hard loans may be a solution.

How Do You Get a Hard Money Loan?

Odds are you will not find a hard money loan at your local bank or through your traditional mortgage broker.

Instead, get to know real estate investors and real estate agents who can refer you to hard money lenders in your area.

In large cities, you will find private money firms that work with investors to buy real property. In smaller cities, the lender might be one person or a small group of investors.

Regardless, you must meet their specific requirements before they lend you money.

How to Get Approved For A Hard Money Loan?
How to Get Approved For A Hard Money Loan?

How Do You Get Approved for a Hard Money Loan?

Traditional loans require you to have a strong credit history and income history to get approved for a loan.

Because hard money loans are less about the borrower’s income and more about the underlying value of the asset, the approval requirements are different.

Your chances of being approved for a hard money loan improve when:

  • You provide a 30-40% down payment
  • The property is in a good area and has stable cash flows
  • You can show sufficient cash reserves to cover taxes and insurance
  • You have a track record in real estate investing
  • Your credit history has no bankruptcies or tax liens

What Are the Costs of a Hard Money Loan?

Hard money loan rates can vary depending on the type of property, the amount of equity in the property, and the length of time a borrower needs to repay the loan.

Typically, hard money interest rates range from 8% to 15%, in addition to lender fees of 1% to 5% of the loan amount.  Typical loan terms are 12 to 24 months and payments are interest only. Of course, hard money loan terms are not set in stone and vary on many different factors.

How Do You Find a Hard Money Lender?

Hard money lenders can help you build your real estate portfolio.  Wilshire Quinn Capital is a direct lender and not a broker, and offers hard money loans in California and nationwide, up to $20,000,000.  Please contact a Wilshire Quinn loan representative at 619-872-6000 to go through your loan scenario today, or visit www.wilshirequinn.com for more information.

  • Funding typically in 5-7 business days
  • Loan Amounts from $200,000 to $20,000,000

  • Interest Rates from 8% to 10.5%
  • Loan Term: 3 – 24 months

  • Commercial & Residential (non-owner occupied) Real Estate

  • Purchase, Refinance, Cash-out Refinance, Rehab, Blanket Loans
  • Foreign National Loans Available

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About Wilshire Quinn

Wilshire Quinn is a San Diego hard money lender focused on short term bridge loans, secured by first trust deeds. The company is based in San Diego, CA with offices in Los Angeles and San Francisco. Wilshire Quinn typically funds loans for their customers in 5-7 days. Their successful track record is closely linked to their ability to make immediate lending decisions based on their highly disciplined underwriting approach. The company funds a variety of loans such as: refinance, purchase, blanket, rehab loans, 1031 exchange, partnership buyouts, and more. They originate hard money loans ranging from $200,000 – $20,000,000. Wilshire Quinn works with commercial and residential buyers nationwide.

Recently Funded Hard Money Loan Transactions

Hard Money Loan Requirements
El Monte, CA

Loan Amount: $4,750,000
Loan Type:  Refinance
Property Type:  Industrial
Loan-To-Value: 60%
Term: 12 Months

Hard Money Loan Requirements
San Diego, CA.

Loan Amount: $765,000
Loan Type:  Refinance
Property Type: Single Family
Loan-To-Value: 60%
Term: 12 Months

Hard Money Loan Requirements
Santa Monica, CA
Newport Beach, CA

Loan Amount: $3,725,000
Loan Type:  Purchase / Rehab / Blanket
Property Type: Single Family
Loan-To-Value: 45%
Term: 12 Months

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By |2021-03-22T23:18:52+00:00March 21st, 2021|Categories: News, Trends|Tags: |
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