Basics: Qualifying

The 3 criteria you must have to qualify for a hard money loan:

1. Sufficient remaining equity in the property. (Typically 30% or more after the new loan, including points and fees. The amount of required equity for hard money loans varies by property type, location and investor.)
2. An acceptable property in a marketable area (at the investor's discretion)
3. The ability to repay the loan to the investor (required by law)

In all cases, the general qualifying process is the same: the investor/lender uses real estate as collateral. The real estate is reviewed to determine whether it holds sufficient value for the investor/lender to be willing to take the risk of making a loan based on this collateral. The borrower's financial state and future potential is reviewed to determine the risk factors present. And finally, an exit strategy is reviewed to determine whether the loan will be completed satisfactorily within a given time frame. Depending on the results of this due diligence process, the investor /lender determines whether - and at what rates and terms - to fund the loan.

What is Hard Money?
History
General Use
Credit
Qualifying
Typical Loan Scenarios
Considerations
Rates, Terms, Points & Fees
Urban Legend
 
   

   
Equal Housing Opportunity Lender
A Financial Services Company
Copyright © 2008 Hanover Mortgage Company.
     
   
Hanover Mortgage is licensed for California only.
INTEREST RATES CAN CHANGE WITHOUT NOTICE. ASK US FOR CURRENT RATE INFORMATION. BORROWERS AND PROPERTIES MUST QUALIFY. CONDITIONS AND RESTRICTIONS MAY APPLY. Loan programs, amounts, rates and terms are subject to change without notice. Loan approval is not guaranteed and all loan applications are subject to verification of acceptable credit, income, employment, lien position and value of collateral in the sole discretion of Hanover Mortgage Company. Flood and/or property hazard insurance may be required. Additional fees, conditions, restrictions and limitations may apply. Not all programs are available in all areas. The interest rate for adjustable rate mortgage loans is subject to increase. Please contact Hanover Mortgage Company to determine your eligibility for a specific loan product. Hanover Mortgage is a Mortgage Broker. Mortgage Broker fees will apply unless stated otherwise. California Department of Real Estate, real estate broker license number 00428961. Disclosure: Money invested through a mortgage broker is not guaranteed to earn any interest or return and is not insured. State law dictates that we acknowledge that interest on trust deeds is not guaranteed. No investment is completely risk free and past performance is not a guarantee of future results. Before investing, investors must be provided applicable disclosure documents. "Hanover Mortgage does not offer financing for those transactions defined as ‘Covered Loans’ or ‘High Cost loans’ in any state or federal law." All Rights Reserved.