What Are the Requirements for a Hard Money Loan?

by | Mar 17, 2022

When considering your loan options, one option you might want to consider is hard money loans. Unlike other types of loans, hard money loans typically have fewer requirements. That being said, it does have some requirements. By knowing what these hard money loan requirements are, you can better decide if this is the right type of loan for your situation. Below, we’ll outline some of the requirements you’ll likely face if you’re going to apply for a hard money loan from Quick Lending.

What is a Hard Money Loan and What are the Hard Money Loan Requirements in Houston?

Hard Money Loans | Quicklending

A hard money loan is a type of short-term bridge loan secured by using real property as equity. Hard money loans are common for real estate developers interested in flipping properties. They use hard money loans to quickly secure the funds needed to restore the property and then use the profits to pay back the loan. Another benefit of hard money loans is that they do not have as many requirements as typical loans, making them easier to secure.

Equity

One of the first and primary hard money loan requirements is your equity. This is the real property that you are using to secure the loan. Equity is something that the hard money lenders can collect should you fail to repay the loan, providing them with insurance. For real estate investors looking to restore and flip properties, the equity is commonly the property you are restoring. Other forms of equity are available depending on how much you are looking to borrow.

Available Cash

The next requirement is available to cash. To secure a hard money loan from Quick Lending, we analyze your overall financial strength, including your available cash. We do this to ensure you have enough money to make monthly payments and any holding costs. While the amount of available cash you’ll need varies from loan to loan, a good way to estimate the amount you’ll need is to take six months’ worth of payments plus one-third of the cost of repairs. For a more accurate estimate, don’t hesitate to contact one of our loan officers today, and we can discuss this with you.

Minimum Credit Score

Quick Lending also checks your credit score before issuing a loan. One of the benefits of getting a hard money loan is that you do not necessarily need a strong credit score to secure the loan. That being said, we do have a minimum credit score requirement that we look for before issuing a loan. The minimum credit score required by Quick Lending is 580. Quick Lending adjusts loan terms based on credit score and financial strength, so please get in touch with us today to learn more about how your credit score impacts your available loan terms.

Real Estate Experience

Finally, we like to see some experience in real estate investments. Taking out a hard money loan comes with some risk, and we want to work with clients who are prepared for these risks. Having a plan for how you will use your hard money loan and pay it back within a reasonable time will not only help you but show that you are prepared for the responsibility of taking out a hard money loan. While prior experience in real estate investing won’t necessarily guarantee that you are approved for a loan, it can improve your chances. At the same time, a lack of experience will not automatically exclude you from getting a loan. It is just another factor that we look at and consider when considering loan applicants.

Determine If You’re Eligible for a Hard Money Loan in Houston

While the above list should give you a rough idea of the hard money load requirements, your best bet is to contact a loan officer from Quick Lending to know the specific requirements for you. Once you do, we can talk to you about your purpose for taking out a loan, your financial history, how much you’re looking to borrow, loan terms, and much more. Our loan officers can not only help you determine if you meet the eligibility requirements for a hard money loan but also help you find loan terms that work for your specific situation.

Here at Quick Lending, our goal is to make it as easy and quick as possible for you to secure the funding you need through a hard money loan. While we do have a few hard money loan requirements, we’re also willing to work with you, depending on your situation. Just let us know about any issues you think you might have, and we’ll see if we can work something out. Don’t hesitate to get in touch with us today to get started.