Hard money is a way to borrow without using traditional mortgage lenders. Loans come from individuals or investors who lend money based (for the most part) on the property you’re using as collateral.
Most loans require proof that you can repay them. Usually, lenders are interested in your credit scores and your income available to repay a loan. If you have a solid history of borrowing responsibly and the ability to repay loans (as measured by your debt-to-income ratio), you'll get approved for a loan.
Getting approved by a traditional lender is a painfully slow process – even with great credit scores and plenty of income. If you have negative items in your credit reports (or an income that is difficult to verify to your lender’s satisfaction), the process takes even longer and you might not ever get approved.
Hard money lenders take a different approach: they lend based on collateral securing the loan, and they are less concerned about your ability to repay. If anything goes wrong and you can’t repay, hard money lenders plan to get their money back by taking the collateral and selling it. The value of the collateral is more important than your financial position.
Hard money loans are generally short-term loans, lasting from one to five years. You wouldn't want to keep them much longer than that anyway, because interest rates for hard money are generally higher than they are for traditional loans.
If you have a specific scenario and property that you would like us to price and give you the requirements, please feel free to contact us.
