Rather than relying just on your ability to repay, hard money lenders lend depending on the collateral backing the loan. The assets that hard money lenders use as collateral might be sold if the borrower fails to pay back the loan. Traditional lenders, on the other hand, may not be able to approve such transactions. Isn’t it possible to get a loan for the property, but you’ll have to hunt for a different form of loan?
What Are Hard Money Lenders?
It’s known as “hard money lending” since it’s more difficult to earn and repay than soft money lending. In contrast to traditional banks, hard money lenders base their decision to lend money on the value of the collateral being used to secure the loan. If you’re looking for a short-term loan with severe restrictions, hard money loans may be the best option for you.
What Is A Hard Money Loan?
An investor or business provides short-term property financing in the form of a hard money loan. One to three years is the maximum period for a hard money loan, which might be as short as one to 15 years for a regular mortgage loan. Because hard money loans are short-term, they carry higher interest rates than standard mortgages. Taking on more risk means a bigger potential return for a hard money lender.
Examples Of Hard Money Lenders For 2022
BridgeWell Capital Hard Money Lenders (The Best Hard Money Lender in the Country)
When it comes to hard money loans, there’s no better option than BridgeWell Capital. There are many advantages to using BridgeWell Capital as a hard money lender. These include quick funding periods, no hidden fees in the closing charges, and no requirement for personal income.
BridgeWell Capital may provide a commercial hard money loan of up to $3 million for a year in as little as five to 15 days in Virginia Beach (Commercial Hard Money Loans Virginia Beach), VA.
Lima One Capital Hard Money Lenders (Best for Residential Fix and Flip Loans in the Short Term)
It’s possible to get a fix-and-flip, fix-to-rent, or a typical construction loan through Lima One Capital, which has a variety of funding choices. The maximum loan amount for fix-and-flip and construction projects is $3 million. There is a $20 million limit on the value-add bridge loan.
The terms and percentages used in each product are different. New and seasoned investors alike can benefit from Lima One Capital. The required credit score ranges from 600 to 660.
Visio Hard Money Lenders
A wide range of lending options is available through Visio Lending, including single-rental loans and loans for multiple properties. Additional loan options are available through Visio Lending’s vacation and short-term rental portfolio. Loans are approved provided the borrower has a positive cash flow from their property and does not have any personal debt to income (DTI).
One of the best options for homebuyers with good credit who want to buy and restore properties is Visio Loan, which has numerous lending options to select from. You can’t apply through the website, but you can use the form here to get in touch with a customer service agent.
Appraisal fees range between $300 and $500.
$1,645 per property plus $750 per year
RCN Capital Hard Money Lenders (Best for Investors with a short-term track record might consider this option)
Anyone who has worked with RCN Capital in the past and is interested in fixing and flipping long-term rental properties should look into the company. To join RCN, you must have completed at least two recent property flips or long-term leases. RCN Capital offers 10-day closing loans for up to 90% of the LTC and 100% of the refurbishing costs.
You can apply for RCN Capital’s services online. You can ask any questions you have about the application process by chatting with a live operator.
CoreVest Hard Money Lenders (Best Lender of Choice for Large-Scale Projects)
CoreVest may be an option for small business owners looking to raise funding for more ambitious projects. The blanket mortgage product, which permits up to a 75 percent LTV, is offered in five, seven, and ten-year terms. Builders use the fix-and-flip credit line to finish projects, sell them, and secure a revolving credit line for their next flip. With a simple click, you can gain access to a $1 million credit line.
To fund larger projects, business owners might use CoreVest. With a 75 percent maximum loan-to-value ratio, blanket mortgages are available for five, seven, or ten years. Builders can use a fix-and-flip credit line to complete their projects, sell them, and carry on their business with a revolving line of credit for their next flip. A $1 million credit line can have a limit of $50 million.
CoreVest’s website features both an online application and a chatbot that you can utilize to help you get started. The 800 number provided by CoreVest is also available if you prefer to talk to a real person. Please contact CoreVest immediately if you are interested in applying.
When considering a hard money loan, make sure that the rental income or fix-and-flip profits cover all costs, including the hard money loan fees, by performing a cash flow projection. Calculate all of your anticipated revenues and expenses to achieve positive cash flow.
How to Determine Hard Money Lenders
The interest rates, periods, and borrower requirements should all be taken into account when evaluating the top hard money lenders. Consider whether or not lenders are willing to work with new investors and whether or no prior experience is required to obtain finance. When constructing our list, keep in mind the quickness of funding and the maximum loan amount.
It is easier to receive money with hard money loans than it is with a traditional loan. Consequently, lenders may offer loans that cannot be traded on the secondary market. Due to the increased interest rates and fees associated with these loans, they should only be used as a last resort when all other choices have been exhausted.
If you need conventional funding first, look into it before turning to hard money lenders. Take the time to calculate your total repayment obligation before signing any paperwork for a hard money loan.
