The hard money loan process is not as complicated as you may think. In fact, it is much easier to apply for a hard money loan than a traditional bank loan. Hard money loans are popular with savvy real estate investors because they’re short-term, they’re quick, and they’re flexible. Before you apply for a hard money loan, you should understand the lending process. Here are the steps of the hard money loan process:
- Pre-qualify for the loan. Notify the lender of your investment plans and the lender will inform you tell you what to do before you apply.
- Do your research and find a property that you want to invest in. Next, put your deal under contract.
- Determine the contract price, the cost of repairs and maintenance, and what the market value of the property is. Knowing the value of the property is important because it serves as collateral in the loan.
- Apply for funding.
- Provide the lender with all required documentation and paperwork associated with the property.
- The loan officer submits the loan. If you are approved, the lender will convey all information in regards to closing costs and other terms.
- You sign all of the documents and the deal is closed. Hard money lenders can generally finance the loan in a matter of days.
Unlike traditional lenders, hard money lenders can offer real estate investors two-way communication. Traditional lenders may have strict regulations for potential borrowers but hard money lenders work with the borrower to find a loan that works for them. Because hard money lenders can negotiate the terms of the loan with the borrower, communication is an important aspect of the hard money loan process.
Finding a hard money lender to handle these investments doesn’t have to be difficult. Find out more about HML Investments here.