Real estate investors often seek financing options that offer speed, flexibility, and fewer requirements than traditional bank loans. Hard money loans can be an ideal solution. These loans are primarily used for real estate transactions, and the property secures them. 

This guide will explore hard money loans, covering their benefits, application process, and costs to help you determine if they fit your investment strategy. When you’re ready to dive in, contact Malve Capital to get started. 

What Are Hard Money Loans?

Hard money loans are short-term, asset-based loans used primarily in real estate investments. These loans are provided by private investors or companies rather than traditional banks. Key characteristics of hard money loans include:

  • Collateral—The property being purchased or renovated serves as collateral.
  • Term Length—Typically, these loans have a term of 6 months to 3 years.
  • Approval speed—Approval and funding can happen quickly, often within days.
  • Flexibility—Lenders have fewer requirements compared to traditional loans.

Hard money loans are often used for fix-and-flip projects, land development, and other real estate ventures where time is of the essence. Because they are asset-based, the borrower’s credit score is less critical than the value of the property securing the loan.

Benefits of Hard Money Loans

Hard money loans offer several advantages, making them attractive to confident real estate investors. Here are some key benefits:

  • Quick approval and funding—Traditional loans can take weeks or months to process. Hard money lenders can approve and fund loans in a matter of days.
  • Flexible terms—These loans often have more flexible terms than conventional loans, allowing for customization based on the specific needs of the borrower and the project.
  • Less stringent requirements—Hard money lenders focus on the property’s value rather than the borrower’s credit history or income, making these loans accessible to more investors.
  • Asset-based security—Since the property secures the loan, lenders may be more willing to finance high-risk projects that banks might avoid.

These benefits can be crucial for investors looking to capitalize on time-sensitive opportunities or those with less-than-perfect credit.

Costs and Fees Associated with Hard Money Loans

While hard money loans provide numerous benefits, they cost more than traditional financing options. Here’s a breakdown of typical costs and fees:

  • Interest Rates: Hard money loans often have higher interest rates, ranging from 8% to 15%, due to the increased risk for lenders.
  • Points: Borrowers typically pay points, which are upfront fees calculated as a percentage of the loan amount. One point equals 1% of the loan, and hard money loans often charge between 2 to 4 points.
  • Closing Costs: These can include appraisal fees, origination fees, and other miscellaneous costs, which add up quickly.

Understanding these costs is crucial for investors to ensure their projects remain profitable. Because hard money loans are short-term, borrowers must plan an exit strategy, such as selling the property or refinancing with a traditional loan.

Application Process for Hard Money Loans

  1. Submit a Loan Application–Provide details about the property, the investment plan, and your experience as an investor.
  2. Property Appraisal–Malve Capital will arrange an appraisal to determine the property’s value and ensure it meets its criteria.
  3. Loan Approval–If the property is deemed a viable investment, Malve will approve the loan, often within a few days.
  4. Funding—Once approved, we will disburse the funds, allowing you to proceed with your investment project.

Because hard money loans are asset-based, the process focuses more on the property and less on the borrower’s financial background, expediting approval and funding.

Why Malve Capital

At Malve Capital, we offer hard money loans with rapid approval and funding, allowing you to act quickly on lucrative opportunities. Our flexible terms and asset-based lending approach mean fewer hurdles and more tailored solutions to your unique needs. 

When you partner with us, you gain a team dedicated to your project’s success. We provide personalized support throughout the loan process, ensuring transparency and confidence every step of the way. Trust us to help you navigate your real estate investments with confidence.

Apply for a Hard Money Loan Today

Malve Capital provides hard money loans tailored to each investor’s unique needs. Don’t let traditional lending barriers hold you back. Contact us today to discuss how our hard money loans can help you succeed in your next real estate venture. Call us now to get started!