How Long Does It Take to Be Approved for Hard Money Loans?

How long does it take to be approved for hard money loans? We’ll answer that key question right here. As a bonus, we’ll also answer how long funding takes after approval, how to apply and qualify, and more.

Main Takeaways: How Long Does Loan Approval Take for Hard Money Loans in Baltimore & Beyond?

• Typically, hard money loan approval takes days or weeks. You can make that process faster by having all the necessary documents ready, like tax returns and bank statements.
• Also, you must meet hard money loan requirements, such as target property and credit score requirements.

Table of Contents

• How Long Does It Take to Be Approved for Hard Money Loans?
• Explaining What’s Involved in Loan Approval
• How Can You Meet Hard Money Loan Requirements?
• How Long Does It Take for a Loan to be Deposited with Hard Money?
• How Much Money Will Hard Money Lenders Let You Borrow?

How Long Does It Take to Be Approved for Hard Money Loans?

Hard money loans can typically be approved within days or weeks. Consequently, this is one big advantage that hard money lenders, like Baltimore hard money lenders, have over traditional bank loans.

Explaining What’s Involved in Loan Approval

In this section, we’ll get into typical hard money loan application steps. Also, we’ll explore which documents are hard money loan requirements.

What Does the Hard Money Loan Application Process Look Like?

Here is a rundown of what the hard money loan application process can look like:

1. Find the Right Lender: Before anything else, you need to find a hard money lender that is a good fit for you. For example, if customer service is a priority, you might go with a local lender.
2. Finish Your Application: Now, you should apply for your hard money loan. At this point, your lender may check your background in the form of your basic personal information, basic property info, and requested loan amount.
3. Go Through a Financial & Property Info Check: Next, the lender might ask for your financials, like your bank statements and tax returns. Moreover, they may ask for more detailed information about your property. For instance, if you’re using your loan to renovate a rental property, they might want to know about its current rental income. In essence, they want to ensure you meet their hard money loan requirements.
4. Complete Your Property Appraisal: At this point, you will go through a property appraisal. This will determine how much your property is valued, especially in comparison to other nearby properties.
5. Close on Your Hard Money Loan: This is the long-awaited point where you can finally close on your loan. All that’s left is looking through the terms, signing applicable forms, and paying your down payment and closing costs.

What Documents Are Necessary for Your Initial Application?

The information involved in hard money loan requirements can vary by company.

In general, though, you’ll need to start with your basic information. For instance, you must provide your name, email address, phone number, reason for needing the loan, desired loan amount, and any relevant property addresses.

Then, the hard money lender may follow up with questions about your background, such as:

• Is this your primary residence?
• Are you in foreclosure?
• Are you in bankruptcy?
• What is your credit score?

After this, you likely will be asked for property-related information. This can include your property’s purchase price, its current value, projected after-rehab value, as well as how much that rehab is expected to cost.

Additionally, the hard money lender could ask further questions, like:

• Do you have any other loans on the property you plan on using as collateral, or any other loans, in general?
• Have you ever used a hard money loan before?

Which Papers Do You Need During the Approval Process?

As your lender reviews your application, they may ask for income and property-related documents. Your lender can’t move forward until they process these. Luckily, if you have these on hand, you can speed up that process. These hard money loan requirements can involve:

• A copy of your driver’s license
• Sales contract and any deposit checks
• Bank statements
• Tax return files from the past 2 years
• List of desired property repairs and expenses
• A copy of your property’s appraisals or inspection reports
• All corporate documentation
• Cross-collateral property addresses (if applicable)

How Can You Meet Hard Money Loan Requirements?

Some hard money loan requirements you should check off include:

Have a Good Target Property

Hard money loans require properties as collateral. In addition, they will need that property’s current or after-repair value to help determine your loan terms.

As such, to qualify for a loan, you must have a property in mind. Also, the property should have promising profit potential.

Maintain a High Credit Score

Your credit score is one of the most crucial hard money loan requirements. It will play a pivotal role in your loan approval and terms. So, you should strive for a good credit score in the mid-600 range or higher.

Prepare Your Down Payment

Hard money lenders may want a down payment of around 10% to 30% of your total loan amount.

So, to get funding quickly, you might want to have this money set and ready to go. You also might want to pay a bigger down payment now so that you can get lower interest rates down the line.

Obligatorily, we must note that down payment requirements may differ, depending on the lender.

Map Out Your Payment Plan

Your hard money lender will want to know you can follow through with your loan payments. After all, they would be pouring lots of resources—and risk—into your investment if they lent to you.

So, you must prove your investment’s viability. You must display exactly how you will put your project plan into action. Furthermore, you should show how profitable your project would be and how you’d use its funds (or other funds) to pay off your loan.

Other Hard Money Loan Requirements

In terms of hard money loan requirements, also look at your:

• Loan-to-value (LTV) ratio
• After-repair value (ARV)
• Debt-to-income ratio

These are just some of the main factors that impact your hard money loan eligibility and rates.

How Long Does it Take for a Loan to be Deposited with Hard Money?

It shouldn’t take long to be funded after approval. Once you’ve submitted all necessary documents, the lender should deposit your money within a few days. Then, you can use your hard money loan to its full potential.

How Much Money Will Hard Money Lenders Let You Borrow?

Hard money lenders typically provide 65 to 80% of your total property’s value and rehab costs.

Furthermore, some lenders can offer up to 90%, while the rare lender (like us, if we may brag!) may offer up to 100% of it.

However, the specific amount you’ll get will depend on your level of qualifications.

Get Your Loan Fast with Baltimore Hard Money Lenders

It can take just days or weeks for hard money loans to be approved. It can go even faster if you meet the hard money loan requirements in advance, like preparing critical documents, your down payment, and your loan repayment plan.

If you really want to get your loan quickly, Maryland Hard Money Lenders can help. We typically send borrowers funding within just 48 hours after approval. That way, you don’t miss out on lucrative deals. Even better, if you’re an experienced real estate investor with sufficient collateral and good credit, we may be able to offer you up to 100% funding. So, call us today to kickstart your investment!