The Top 6 Things You Don’t Know About Hard Money Loans

6 things you didnt know about hard money loans

Hard money loans are an easy option for those looking to buy or “fix and flip” real estate quickly. However, they differ from standard loans in a few important ways. Following are the Top 6 questions I get asked about this type of loan.

  1. What Is A Hard Money Loan? A loan made to a real estate investor to purchase and repair an investment property (i.e. not owner occupied) by a company that specializes in this type of loan secured by real estate.  
  1. What are the Requirements For Getting A Hard Money Loan?  These vary from lender to lender.  Most lenders want to make sure the borrower will pay them back. Two approaches that are used for this. 1) A substantial down payment. If the borrower has “skin in the game” they are less likely to walk away from a loan obligation. 2) Verified credit and income.  The lender wants to make sure that the borrower has sufficient income to service the loan and a good credit history.
  1. What are the Risks And Benefits Of Hard Money?  The risks are tied to the speed at which you complete your project.  Hard money loans tend to be expensive compared to bank loans and if your project is severely delayed it can cut into your planned profit on the deal. The benefits are speed, ease of use and availability. With CCC Holdings, the approval process is fast and easy, we typically close in 3-4 weeks, and we can work with properties that need significant repairs and tie the loan to the after repaired value.       
  1. What is the Approval Process?  With CCC Holdings, this is very quick and free.  If you would like to be preapproved, All you need to do is request an application. I will send you the one page application. Once it is completed and returned I can determine your max loan amount subject to real estate value and provide you with a proof of funds letter for making offers. 
  1. Do hard money lenders require down payment? This varies from lender to lender.  At CCC Holdings, if your meet credit, income, and loan to value standards you will not need a down payment and we can fund 100% of the purchase and repair costs. If you don’t meet these standards, some cash will be required to mitigate the risk.  
  1. Can I get a hard money loan with bad credit? Yes if you have a co-signer with good credit and income. The cosigner can be a spouse, family member, friend or business partner.

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