How do hard money loans work?

If you are a real estate investor looking for ways to fund your investment, a 

hard money loan by Accelerated Lending Group is worth considering.

Hard money loans are a better option compared to traditional loans in certain situations.

Let’s see how this type of loan works and find out if they suit your specific needs.

What are hard money loans?

Hard money loans are secured loans that real estate investors use to fund their investment projects. If you are a house flipper, this type of loan is ideal since it’s a short-term loan that fits your timeline in renovating a property and then selling it for a profit.

If you are looking for a hard money loan, you should keep your eye on private lenders rather than mainstream institutions like banks. 

Contact a Bakersfield mortgage broker for more information on hard money loans.

What are the differences between hard money loans from traditional loans?

Hard money loans have several differences from traditional mortgages. This loan is often used to purchase investment properties rather than residential homes.

While requirements and terms may vary by lender, there are a few similarities:

  • Traditional loans close between 30 and 60 days, while hard money loans can close in a few weeks or even days.

  • Hard money loans have short repayment periods, usually six months to a few years, while traditional loans typically have terms of 15 to 30 years.

  • You should expect higher interest rates for hard money loans ranging from 8 to 15%.

  • You might be able to make interest-only payments with hard money loans compared to traditional loans, where you start paying for the principal and interest at once.

  • Hard money lenders are more concerned with the property’s value since the loan is secured by it. In contrast, traditional lenders check your credit score, proof of income, and DTI before loan approval.

  • You’ll need to make a larger down payment for a hard money loan, usually between 20 to 35%, based on the property’s current or after-repair value. On the other hand, traditional mortgages require a low 3% down, but you need to pay for PMI or private mortgage insurance.

  • Hard money loans may have lower fees and shorter penalty periods than traditional loans. 

If you think that a hard money loan suits you, ask a hard money lender in Bakersfield for the best deals available.

Are you looking to buy a home in the zip code 93309?

If you are new to real estate investing and are looking for ways to jumpstart your project, a hard money loan is a quick fix that you can look at.

Ask our loan officers for more information. Call or send us a message today.


* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.

Get started with your Digital Mortgage

No hassle, no obligation

Get Started Now!

This site uses cookies to process your loan application and other features. You may elect not to accept cookies which will keep you from submitting a loan application. By your clicked consent/acceptance you acknowledge and allow the use of cookies. By clicking I Accept you acknowledge you have read and understand Accelerated Lending Group's Privacy Policy.