Hard Money FAQs
Get All Of Your Hard Money Questions Answered Here.
There are key differences between hard money loans and conventional loans. When a buyer, borrower or investor wants to consider a hard money loan, it is important to understand these differences. Not all hard money lenders are the exact same. In fact, because hard money comes from so many different sources, there are a myriad of different loan terms available; however, there are many common themes among hard money lenders.
Below are the most commonly asked questions about hard money loans and how to get them through us. If you need any other questions answered, please feel free to email us or contact us at (405) 204-1715 and we would be more than happy to help.
One of the greatest things about a hard money loan is the speed at which you can get one. Sometimes approvals can be granted in as little as 24-48 hours and settlements can take place in less than a week. Remember, however, that the lender will have to make an appraisal of the property, order and inspect title work, and have lender documents drafted. This could take anywhere from days to weeks depending on the circumstances but, in an emergency situation such as foreclosure, we may be able to speed up the process to accommodate you.
Hard money is not appropriate in some circumstances:
- When you need money “long term.” Most hard money deals are for no more than 6 months to 2 years
- When the deal is “tight.” Don’t look for hard money loans higher than 65-70% of the conservative property value, if that. Hard money lenders aren’t interested in losing money, and the only way to ensure that is to lend based upon very conservative loan-to-value ratios
- Oddball properties. Not many hard money lenders are looking to get involved in farm operations, mobile homes, or geodesic domes. Don’t ask
- Principal residences. Hard Money Partner is not properly licensed to provide loans to owner-occupants. We only lend on commercial or investment properties
Every hard money deal has different lending criteria and different point structures and interest rates. As a general rule, count on an interest rate anywhere from 13-14%, and you will probably have to pay anywhere from 3-5 points. Sometimes we will require points to be paid up-front, while other times we can build them into the loan amount. We have come to find that each hard money deal is unique and it is impossible to provide exact numbers and loan structure until the deal is reviewed and approved, although all loan terms are always disclosed up-front and long before settlement.
No. Each deal stands on its own. If it makes good loan sense, you will get the loan regardless of how many properties you own.
Sometimes. We will generally lend you up to 65% of the property value and, unlike a conventional lender, will not reduce the loan amount just because the purchase price is much lower than the property value. Thus, if you buy right, you may be able to get a loan for 100% of the purchase price, although most times we require you to at least pay closing costs.
For example, if you find a property worth $100,000.00 and get the sellers to unload it for $60,000.00, we may well give you the full $60,000.00 purchase price.
On the other hand, if you are buying a rehab property that is worth only what you are paying for it until such time that it can be repaired, we will most likely do one of two things: 1) give you only up to 65% of the purchase price (which means you must find the other 35%); or 2) give you the full purchase price and require you to establish a construction escrow to ensure you make the repairs to increase the value to an amount substantially higher than the original purchase price.
We currently lend in the Oklahoma City metro and Tulsa metro in Oklahoma.
The process is explained more fully in the “Lending Process” section of this website, but it is never very cumbersome. You can also download our Free Report entitled “Seven Steps to Guaranteed Hard Money Loan Approval.” Unlike a conventional bank loan, you will only need to provide basic information about you and the property. We will evaluate the current and fixed-up value of the property, verify clean title and that we will hold a first lien position, and make sure you have the ability to rehab, sell, or refinance the property within the term of the loan. The process is much more streamlined than with traditional lenders, thus allowing you to obtain money faster.
Maybe. Every deal is different. Once your deal is preliminarily reviewed, you will be told by the underwriter which documents you will need to provide.
Hard Money Bankers, LLC is not a licensed “mortgage lender” and does not lend money on primary/principal residences. We are a commercial/investment lender. All our loans are either funded by us or by one of our private capital sources. We also broker hard money loans to other hard money lenders within our network for a fee. Some states require commercial lenders to be licensed and, in those instances, we are.
Sometimes we will allow you to roll points into the loan. However, most other title and lender fees, or other closing costs, will have to be paid by you at closing.