Hard money loans are fairly easy to obtain, especially when compared to a conventional bank loan. The approval process for hard money can take as little as a day and funding can be completed within a week if necessary. Approval and funding for bank loans generally take 45 days or more.
Hard money lenders are able to look past borrower issues such as less than perfect credit scores, lack of income history or recent short sales, foreclosures or loan modifications. These are all issues that would prevent a conventional lender from providing financing.
While it is much faster and easier to get a hard money loan, there are 3 major reasons why your hard money loan request will be denied.
1. The borrower doesn’t have enough down payment or enough equity in an existing property
The most common reason for a hard money loan request being turned down is that the borrower doesn’t have enough of a down payment to put toward the purchase of the property, or they don’t have enough equity to borrow against in a property they already own.
CONTINUE READING: 3 Reasons Your Hard Money Loan Will Be Denied