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Frequently Asked Questions (FAQ)

  • What is the difference between a conventional, non-QM and “hard money” loan?
  • Who licenses you to sell “hard money” loans?
  • Do I need an appraisal with a hard money loan?
    • Usually not. Most hard money lenders do not require an appraisal. That’s part of the reason borrowers are often able to close in 7 days or less with a hard money loan.
  • Do I need a down payment for a hard money loan?
    • Private loans almost always require a down payment. Usually, the maximum Loan to Value (LTV) ratio for a hard money lender is 70, which means the down payment would have to be 30% of the value of the property. There are exceptions. (Please let us know if you’re looking for a small down payment, as we can often find other loan options to satisfy your needs.)
  • Are hard money lenders worth it?
    • In many situations, a hard money loan is not the best option. If you’re buying your first home and you easily qualify for a conventional loan, you will most likely get a lower interest rate and monthly principal and interest payment. In other cases, such as if the borrower is self-employed or has non-traditional income, a non qualified mortgage (Non-QM) loan will be an option at a better rate than a hard money loan. However, successful investors (including the brokers at Hard Money West) often use hard money loans to complete real estate deals that would not otherwise be possible. Please contact us anytime if you need help figuring out the best option for your situation.

If you have any other questions, please Contact us.