Hard Money Lending in MD, VA & DC

Hard Money Difference

Can Hard Money Loans Be Used for Primary Residences?

Hard money loans cannot be used to finance primary residences or owner-occupied homes. Hard money loans are business loans issued to real estate investors looking to make a profit. As such, they are not subject to many regulations that apply to consumer lending.

What Are the Typical Terms for a Hard Money Loan?

Unlike consumer loans, hard money loans are short-term loans. They are not designed to hold for 15 or 30 years. Their typical term is between six to 18 months — just enough to give you time to rehab a property and sell it. If you are looking to keep your property as a rental after your rehab is completed, you will need to refinance with a traditional lender.

Do Hard Money Loans Close Quicker Than Traditional Bank Loans?

Yes! We move extremely fast. New Funding Resources can preapprove real estate investors in as little as 24 hours and close in as few as five days. Compare that with 30-45 days for a traditional loan.

How Do Hard Money Lenders Decide How Much to You Qualify For?

Typically, a hard money lender will decide how much of a loan you qualify for based on your overall strength as a borrower, how much money you have and the particulars of a specific deal. Direct lenders like New Funding Resources lend their own money and have the most flexibility when it comes to making exceptions and thinking outside the box. Such lenders decide which loans to fund based on their own risk tolerance and lending experience. Other hard money lenders raise money from capital investors who might impose their own preferences on their lending criteria. Hard money brokers do not commit any of their own funds and might work with multiple lenders. They will charge you additional fees for their service.

Hard Money Loans Make Real Estate Investing Possible for Anyone

There are three major reasons why, without hard money lending, real estate investing would be limited to those with deep pockets.

Many Real Estate Rehabbers Don’t Qualify for Loans

Some investors don’t have a high credit score or don’t show enough income to qualify for a traditional loan. Others are turned down because they already have too many mortgages. Without hard money financing, these borrowers would have no choice but to sit on the sidelines and watch other people make money.

Many Residential & Commercial Properties Don’t Qualify for Financing

Other lenders base their loans on the current condition of the property. With few exceptions, they lend to consumers, not rehabbers, so they require a property to be “livable” right away. They don’t want to lend on properties that are damaged or trashed or that don’t have a functioning kitchen or bathrooms. Hard money lenders focus on the property’s potential or what it can be once an investor finishes up the rehab.

Only Hard Money Loans Can Effectively Compete with Cash Offers

How many times do you see a property go under contract only to be back on the market due to the buyer’s financing falling through? A great investment opportunity often comes with a seller who does not want to dilly dally. They want to sell their home fast and without financing contingencies. An all-cash offer is hard to compete with — unless you are working with a hard money lender. Because of their speed and their streamlined underwriting, hard money loans are widely considered equivalent to all-cash offers.

Hard Money Advantage