Hard Money Lenders Boston: Fast Funding Options
Are you thinking about funding your next real estate project in Boston with a hard money loan? Whether you’re planning to renovate a brick townhouse in Dorchester or purchase a rental property in Southie, hard money lenders in Boston offer the speed and flexibility you need. Hard money loans are a viable alternative to conventional loans and are especially convenient for those with tight project timelines, limited initial capital, or less-than-perfect credit.
Even if you’re not an investor but need to bridge the gap between buying and selling a home, we have some alternatives to help you leverage your home’s equity. This article will guide you through the essentials of hard money lending in Boston, helping you determine whether this financial tool fits your real estate investment or home-buying objectives.
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, hard money lenders in Boston focus more on the value of the property being used as collateral rather than the borrower’s credit score and income. Their clients typically include house flippers and those purchasing rental properties, who need quick access to funds and flexible loan terms.
Hard money lenders determine the loan amount based on the after-repair value (ARV) — the estimated value of a property after all renovations and repairs are completed. They typically lend a percentage of the ARV to ensure a profitable investment and minimize risk.
These loans come with higher interest rates, ranging from 8% to 15% or more, and additional costs like origination fees, closing costs, and points. If a borrower fails to repay the loan, the lender can take possession of the property to recover their investment.
How does a hard money loan work?
If you’re a real estate investor in Boston seeking fast and flexible financing, working with hard money lenders could be the solution. Here’s a quick rundown of how hard money loans work in Boston:
