We lend from $250,000.00 up to $5 Million Dollars
HML F.A.Q.
Hard Money Loan FAQs
How much of a loan can I get?
What is a hard money lender?
Hard money lenders do not require a person’s earning power. Instead, hard money lenders look only at the value of the property the future borrower wants to purchase or refinance. In other words, the value of the property that the potential borrower wants to purchase or refinance acts as the collateral Earning power versus collateral is the primary difference between bank loans and most hard money loans.
What differentiates hard money lenders from bank lenders?
Earning power versus collateral is the primary difference between bank loans and hard money loans. The foundation of a bank loan is that the borrower has the required income to repay the loan. This essentially means that the primary interest of a bank during the evaluation process of your ability to repay the loan is their income or, how much income the property produces. For a bank loan, a borrower must provide proof of employment, tax returns and other financial statements. This takes time to organize and get approved.
Hard money lenders do not require a person’s earning power. Instead, hard money lenders look only at the value of the property the future borrower wants to purchase or refinance. In other words, the value of the property that the potential borrower wants to purchase or refinance acts as the collateral. It is the value of that collateral that hard money lenders evaluate.
Does it matter where I live to get the financing I need?
You can live anywhere but the property you are borrowing for must be in one of the states we lend in. Alabama, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Kanas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Missouri, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Utah, Virginia, Washington, Washington DC, Wisconsin and Wyoming.
How long does it take to receive the loan?
If the property qualifies, because we are asset based it can take as little as a few days to a few weeks.
What type of properties qualify?
Commercial retail properties, commercial office buildings, Industrial properties, Warehouses, Mixed-use properties, Multi-family with five family units or higher, Residential non-owner occupied, one-four family* properties in a corporate or LLC name.*Not eligible for properties located in AL, DC, MN, OR, SC, and UT.
What do I need to apply?
You will need to complete a brief summary of the property, on the form we send to you . Attach interior and exterior photos of the property.
How does my credit score effect the loan?
Since we base the loan approval on the asset your credit score is not part of the equation. Your score will however, determine your interest rate anywhere from 11%-13%.
How long will I have to pay the loan back?
Terms are anywhere from one to three years.
What if I pay the loan back early?
There is not any pre-payment penalty.
Will I be required to put in any money?
Our loan to value ratio (LTV) is 65%. Which is the ratio between the loan amount and the property value in percentage. So you would need to have the balance of the money.
Do you do any other types of loans?
Yes, we do bridge loans which are useful for investors to quickly close on a property while leveraging short-term financing benefits to invest in another property. Mezzanine Loans are similar to second mortgages except the debt is secured by the stock of the company that owns the property, not the real estate itself.
Are real estate owned properties something you would work with?
Yes, since we are a private lender we can provide financing for REO’s for property purchases based on existing loan-to-value.
Will you work with brokers?
Yes, our account executives are former brokers, we know the importance of a lender that you can trust and can get the loan closed fast. Since we are a private lender we will have the funds on hand so you can be sure the funds are available.
Can I get a 1-4 family residential loan where ever you loan?
1-4 family properties are not Eligible for Properties located in AL, DC, MN, OR, SC, UT and WA.
What are the typical rates?
The rates are very competitive – please call on how we can help you.
Do I need to get professional photos of the property?
That is not necessary but you will need good quality photos. The better we can see what the property looks like the better chance of your approval.
How do you establish the value of the property?
To get approved you can use comps in the area or tax records. For the final loan we will need an appraisal and a Broker Price Opinion (BPO).
What are advantages of hard money lenders?
Hard money lenders do not require stellar credit for approval. Hard money loans base the loan on the value of the property and not on credit.
Not only does a hard money lender not base the decision on a credit check, but they don’t require the extensive documentation of income, tax records, and more in order to get the process going. This makes the approval process faster so you don’t lose out on the property you are interested in.
What documents are involved in a hard money loan?
Since a hard money loan is not based on credit there is no need for extensive documentation. A loan application will be filled out about the property. Street, Interior and Exterior photos will need to be supplied
How do soft money (conventional loan) and hard money differ?
Borrowers of soft and hard money lending enjoy the following benefits: Ease in obtaining the loan, quick access to funds, financial backing from private investors, financial decisions that rest heavily on collateral.
In essence, soft money loans are a combination of traditional lending and hard money lending. With soft money loans, you are still expected to pledge your assets as collateral for the loan. However, your credit is also taken into account giving you a longer repayment term and lower interest rate (assuming that you have a satisfactory credit score).
When does it make sense for a real estate investor to use a hard money loan?
A real estate investor who has a property and is in need of funds quickly can benefit from a hard money loan. For example, an investor who has recently purchased a dilapidated apartment or commercial building may need funds to restore it for use. Hard money loans are great for asset owners who may not want to be subjected to a credit check, won’t qualify or deal with the long process of filling documentation, because they need a loan quickly to prepare the property for sale or rent.