Hard Money Guide
Download Noble Mortgage’s free guide to learn more about what a hard money loan is, when to use a hard money loan, and why they’re beneficial in your real estate investing strategy. We have also included a visual breakdown of how a hard money loan works.
Frequently Asked Questions
What is a hard money loan?
A hard money loan is a short-term asset-based real estate loan that is primarily used to purchase real estate by investors who are either looking for a quick or simpler underwriting process or do not qualify for traditional loans.
Who should apply for a hard money loan?
Hard money loans are an attractive option for borrowers who meet the following criteria:
- Investors looking for quick funding or high leverage loans (up to 100% financing).
- Builders
- Borrowers who do not meet minimum credit score, income, or past bankruptcy/foreclosure.
How does the hard money loan program work?
Noble’s hard money loan program was designed for investors who are purchasing homes that are in disrepair and want to leverage the After-Repaired-Value (ARV) of the property. We loan real estate investors money to purchase and rehab real estate property in Texas. We typically close in 7-10 business days; however, we have closed a loan in 24 hours previously! Hard Money is available for both residential and commercial property in the first lien position.
What's the difference between a hard money loan and a traditional loan?
Hard money loans do not require the same documentation, credit score or downpayment requirements of a traditional loan. We are a private lender and therefore make all lending decisions in-house!
What is required to qualify for a hard money loan?
It depends on what the exit strategy is for the loan. Flipping a home simply requires some capital reserves to handle loan payments and money to get the project started.
We do not have a minimum credit score if you are flipping.
However, if the investor intends on refinancing the property to hold as a rental property, then they would need to qualify for long-term financing which Noble can arrange in-house. These loans typically require at least a 650 credit score.
What is ARV?
ARV, or after repair value, represents the current value plus the value added by any repairs or renovations. Read our blog post to learn more about ARV and how it’s determined.