Hard money loans are faster and more flexible than conventional mortgages — but they work differently. Here is exactly how to get one, from evaluating deals to closing in 7-10 days.
What Is a Hard Money Loan?
A hard money loan is a short-term, asset-based loan secured by real property. The lender focuses on the property’s value — not your income, employment, or credit score. Hard money lenders are private or institutional — they are not banks or credit unions.
- Based on property value (LTV), not borrower income
- Terms: typically 6 to 24 months (interest-only)
- Rates: 9–14% depending on LTV, property type, and market
- Close in 5–10 business days
- No income verification in most cases
Step 1: Find Your Deal and Calculate the Numbers
Before calling a lender, know your deal inside out. Hard money lenders underwrite quickly — they will ask you these questions on the first call:
- Purchase price (or current value if refinancing)
- After-Repair Value (ARV) — what it will be worth after any work
- Renovation budget — if doing a fix-and-flip
- Exit strategy — sell, refinance into long-term loan, or hold?
- Timeline — when do you close? When do you exit?
Most hard money lenders will lend up to 65–75% of ARV (or 70–80% of the current as-is value on stabilized properties). Know what LTV you’re asking for before you call.
Step 2: Contact the Right Lender
Hard money lenders vary widely in rates, terms, and approval speed. What to look for:
- Direct lender (not a broker) — fewer fees, faster decisions
- Experience with your property type (SFR, multifamily, commercial)
- Track record in your market
- Clear, upfront fee structure
When you call, have the property address, purchase price, ARV estimate, and exit strategy ready. Most lenders will give you a verbal indication of interest within hours.
Step 3: Submit Your Application and Property Details
A hard money loan application is minimal compared to a conventional mortgage. Typical requirements:
- Government-issued ID (driver’s license or passport)
- Purchase contract (for purchases) or mortgage statement (for refinances)
- Photos or walkthrough report of the property
- Renovation scope and budget (for fix-and-flip)
- Personal credit authorization (soft pull in most cases)
No W-2s, no tax returns, no pay stubs. The application takes minutes, not days.
Step 4: Appraisal or Property Valuation
The lender will order a drive-by appraisal, BPO (broker price opinion), or full appraisal depending on the deal size and type. For residential properties under $1M, a BPO often suffices. For larger deals or commercial, a full appraisal is typical. Timeline: 1–5 days.
Step 5: Underwriting and Approval
A direct hard money lender makes decisions in-house — no committee, no waiting for a bank bureaucracy. Expect a formal term sheet or commitment letter within 24–48 hours of submitting a complete file. The term sheet will specify loan amount, rate, term, fees, and any conditions.
Step 6: Title and Closing
Once you sign the term sheet, the lender orders a title search. Clean title typically allows closing in 2–5 days. Closing happens at a title company or attorney’s office (depending on state). Bring your ID and any outstanding conditions (insurance binder, entity docs if LLC).
After Closing: Managing Your Hard Money Loan
- Make monthly interest payments on time — some lenders offer interest reserve (pre-funded interest) so you don’t need to pay from cash flow during renovation
- Keep your exit strategy on track — missing your payoff deadline triggers extension fees
- If refinancing out, start working with a DSCR or conventional lender early — don’t wait until the last 30 days
Ready to get started? Get a free hard money loan quote — tell us the address, purchase price, and your exit plan, and we’ll respond within hours. Or learn more about our hard money programs.