Hard Money Lenders Minnesota: Fast Approvals

Are you looking to fund your next real estate venture in Minnesota with a hard money loan? Whether you plan to flip a classic home in Minneapolis or invest in a rental property in St. Paul, hard money lenders in Minnesota provide the speed and flexibility you need.

Hard money loans are an alternative to conventional loans, ideal for those with short project timelines, limited initial capital, or credit issues.

If you’re not a real estate investor but need to bridge the timing gap between buying and selling a home, we’ll share some alternatives to help you leverage your home’s equity. This article will guide you through the basics of hard money lending in Minnesota, helping you decide if a hard money lender is the right fit for you.

Editor’s note: This post is for educational purposes and is not intended to be construed as financial advice. HomeLight always encourages you to consult your own advisor.

What is a hard money lender?

A hard money lender is a private individual or company that offers short-term loans secured by real estate. Unlike traditional lenders, who focus heavily on the borrower’s creditworthiness and income, hard money lenders will prioritize the value of the property used as collateral. This can be a good fit for owners with strong equity but a poor credit score.

These loans are popular among real estate investors, such as house flippers and those buying rental properties, who need quick access to funds and flexible terms. Hard money lenders determine loan amounts based on the after-repair value (ARV), which is the estimated value of a property after renovations. They typically lend a percentage of the ARV to ensure the investment’s profitability and security.

Hard money loans generally have higher interest rates, ranging from 8% to 15%, and shorter repayment periods, usually between 6 to 24 months. Additional costs can include origination fees, closing costs, and points, which are a percentage of the loan amount paid upfront. If a borrower fails to repay a hard money loan, the lender can seize the property to recover the investment.

How does a hard money loan work?

If you’re a real estate investor looking for a financing option that provides speed and flexibility, connecting with hard money lenders in Minnesota could be beneficial. Here’s a quick rundown of how hard money loans work: