Hard Money Lenders Denver: Quick Funding Options
Denver’s competitive real estate market offers numerous opportunities for investors and homeowners. Whether you’re looking to flip a property in Highland or invest in a rental in Five Points, choosing the best way to finance your investments is key. One option worth exploring is a hard money loan, known for its flexibility and quick approval process, ideal for the fast-paced Denver market.
In this guide, we will dive into the specifics of hard money loans in Denver. From the basics of what hard money lenders offer to a detailed look at alternative financing options, we’ll equip you with the information needed to make informed decisions about your real estate investments.
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 provides short-term loans secured by real estate. They cater primarily to house flippers and rental property investors. Unlike traditional lenders, hard money lenders focus on the property’s value rather than the borrower’s credit score. They determine loan amounts based on the after-repair value (ARV), which is the property’s estimated value after renovations.
Interest rates for hard money loans are typically higher than traditional loans due to the increased risk and convenience of fast funding. Hard money loan interest rates usually range from 8% to 15% or more, and repayment periods are shorter, usually between 6 and 24 months.
Additional costs can include origination fees, closing costs, points, and a percentage of the loan amount paid upfront. As with any secured loan, failure to repay a hard money loan can result in the lender seizing the asset, such as a house, to recover their investment.
How does a hard money loan work?
Hard money loans offer a unique financing solution tailored to Denver’s competitive market. Here’s a breakdown of how these loans work:
