If you’re like most people, you’ve heard of hard money loans – but what are they, exactly, and could you use one to purchase an investment property? This guide explains.
3 Common Questions About Hard Money Loans
Hard money loans are ideal for many investors, but if you’ve never explored your options before, you likely have more than a few questions about them. This guide addresses the top three:
- How long does it take to get a hard money loan?
- How long do I have before I have to repay a hard money loan?
- Can I use the money to make repairs?
Here’s a closer look at each.
Hard Money Loan Question #1: How Long Does it Take to Get a Hard Money Loan?
You can be approved for a hard money loan in as little as 72 hours – and in rare cases, even faster. That may be tremendously helpful when you find a great deal and need to jump on it so you don’t miss out.
Hard Money Loan Question #2: How Long Do I Have Before I Have to Repay a Hard Money Loan?
Loan terms are a lot shorter with hard money loans than they are with standard loans. Generally, they can last a very short time (as little as a few months) or a few years – but every situation is different, so the best thing to do is talk to a hard money lender about your options and figure out what’s right for your situation.
Hard Money Loan Question #3: Can I Use the Money to Make Repairs?
You can absolutely use the money from a hard money to make repairs on a house. In fact, that’s part of the appeal for many investors; you can borrow against the home’s after-repaired value, or ARV.
Do You Need a Hard Money Loan?
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