Hard Money Frequently Asked Questions
Below you will find the most common questions that prospective borrowers have about hard money loans.
If you have any questions about qualifying, call us at 888-832-7576.
1. What is a hard money loan?
A hard money loan is a private loan for real estate investors who hold property that is free and clear or near free and clear. The qualification for this type of loan is primarily based on the equity of the property. Credit, income and overall debts are not primary factors in loan qualification. This means a borrower with bad credit, or one who cannot prove their income can still qualify for a loan.
Typically, most hard money borrowers are investors who need access to capital either for the purpose of renovating their existing properties or to buy new properties. A common problem property owner’s face is having low cash flow, thereby preventing them from improving their property or growing their business.
Hard money loans are perfect for investors because unlike traditional loans that take up to three months to qualify for, borrowers who qualify can access funds within 10 business days. This serves as a huge advantage for applicant’s who are strict deadlines and need their loan now.
2. Is there a preapproval process?
Yes. Once we receive your hard money loan application, an underwriter will begin looking at the specifics of your situation. Important factors that we consider are the property, the equity, and the ability of the borrower to pay back the loan. If you meet the basic standards of our guidelines, we will give you a preapproval within 24-48 hours of receiving your application. This process allows us to save time and focus efforts in closing more loans.
3. How do I prequalify for a hard money loan?
Hard Money Go has made the process of applying for a loan easier than ever. No more endless documents, questionnaire and forms to fill out. Simply go to under the apply tab and click application. Once you submit your basic information and a mortgage professional will contact you within 24 hours.
Fill out all the required fields including property type, estimated property value, loan amount, loan type, information about your assets, and other balances. This information is intended to provide our mortgage professionals with a snapshot of your financial situation. Having this vital information allows us to quickly understand which options best meet the demands of your unique situation.
4. I have bad credit, can I still qualify?
Yes, hard money loans are the most common form of loans for real estate investors who have bad credit. Unlike most loans that base qualification primarily on credit, this type of loan determines qualifications based on equity.
As a result of the real estate market collapse of 2008 many borrowers credit scores were negatively impacted as a result of the recession. We understand the importance of capital in growing ones business for growth which is why we provide loans to borrowers with bad credit.
5. I have been denied a loan with other banks and hard money lenders, is there any way I can still qualify?
Yes. Because we are a direct hard money lender, we have the ability to approve borrowers that would otherwise not be approved with other lenders. We are not regulated by the government or have any specific set of loan guidelines, which allows us to provide flexible loan terms and approvals.
As we have mentioned many times throughout the site, approval for a hard money loan is largely based on equity, rather than income and credit. This means that a borrower who has the sufficient equity and experience as a real estate investor can qualify for a loan.
6. How does Hard Money Go determine if a borrower is approved for a loan?
The primary qualification guideline we use is the equity in the collateral being secured to fund the loan. The intent of each loan produced is to provide capital to borrower’s while reducing risk to investor capital. The equity in a property provides the ultimate qualification method when approving a borrower for a loan.
7. Can I get a hard money loan for my home?
No. A hard money loan is only for business and investment purposes. Borrowers cannot secure funds against their primary residence.
8. What type of property can a hard money loan be used for?
Hard Money Go provides loans for residential, commercial, industrial and mixed use real estate. A hard money loan by law cannot be given to a borrower’s primary residence. Because this type of loan is a business loan by nature, the loan must hold a business purpose.
The most common loan we provide is residential property between 1-4 units. We have programs fort fix and flip buyers, hard money refinancing, and various programs for individual investors.
9. I have a foreclosure on my credit report, can I still qualify?
Yes. As we have indicated many times throughout the site, hard money loans are different than conventional loans in that they do no base approval on credit. Decisions regarding a borrower’s approval is based on the level of equity of the property being secured for a loan.
10. Do hard money programs have prepayment penalties?
Whether a hard money loan has a prepayment penalty or not is based on the program the borrower qualifies for. Some hard money programs do have prepayment penalties. The purpose of a prepayment penalty in the case of a hard money loan is to make sure the investor does not lose money on the transaction. Because it costs money to fund a loan, a prepayment penalty covers the cost of expenses associated with providing the loan.
11. What are your loan terms?
Each loan has its own terms, but generally hard money loans are anywhere between 6-10% interest rate. The reason why interest rates are higher for this type of loan is because of the risk associated with providing loans to borrowers with bad credit and inability to prove income.
Hard money loan approvals usually take two weeks after the borrower’s initial application, instead of the standard 3 months for conventional loans.
We have various loan programs for all property types. Whether you have a commercial refinance or residential purchase loan, we can get you approved for the program that best meets your needs. Fees, points and costs for the loan are based on the property, loan amount, loan program and specific financials of the borrower.
12. How long does it take to get a loan?
Assuming the borrower submitted the application and all the required documents at the same time, they can receive funds within 10 business days.
The borrower is partially responsible for the fast closing of the loan. Although there are limited documents that you need to submit, your timely help in getting us the required documents will allow us to process the loan as fast as possible.