Tips for Learning How to Qualify for a Hard Money Loan
Construct a Reasonable Financial Plan
To prove your project’s potential value, you’ll need to come up with a realistic financial plan that demonstrates how you intend to eventually pay off the loan. Plans typically involve renovating the property and improving its value so that it can be sold at a profit or rented out as a source of income. If you develop a solid financial plan, you could receive up to 90 percent of the home’s post-repair value to invest in your project. Since you’ll be expected to fund the remaining costs, having this money on hand will greatly increase your chances of being approved. As such, estimating this cost ahead of time and including it in your financial plan will help you qualify for a hard money loan.
Prepare Additional Documentation
While a hard money lender primarily focuses on the overall profitability of your project, factors such as income and credit could also play a role. Be prepared to provide the lender with your personal financial information, which could include documents such as W-2s, bank statements, and pay stubs. Ultimately, however, hard money lenders are more likely to disregard a poor credit score if you have invested sufficient collateral in the property. This is why hard money loans can be a good option for people who might be unable to get traditional loans due to poor credit scores. If you live in Nevada and are looking to apply for a hard money loan, Streamline Mortgage makes it easy with hard money lenders in Reno, Sparks, Las Vegas, and Henderson.