Hard Money Lenders Seattle: Quick Loan Approvals
2 min read
Looking to fund your next real estate project in Seattle with a hard money loan? These loans are a great alternative to traditional financing, especially for short-term projects or those with credit issues.
In this guide, we’ll break down how hard money loans work in Seattle, their costs, and alternative financing options. Plus, we’ll highlight top local lenders to help you decide if this financing option aligns with your real estate goals.
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 offering short-term loans secured by real estate. Unlike traditional lenders, who emphasize the borrower’s creditworthiness, hard money lenders will prioritize the property’s value. They often work with house flippers and those buying rental properties needing quick access to funds.
Hard money lenders use after-repair value (ARV) — the estimated value of a property after renovations — to determine loan amounts. They typically lend a percentage of the ARV to ensure the investment’s profitability.
Interest rates for hard money loans range from 8% to 15% or more, with repayment periods of 6 to 24 months. Borrowers also face costs like origination fees, closing costs, and points. If a borrower fails to repay, the lender can seize the property to recover their investment.
How does a hard money loan work?
A hard money loan might be the right choice for you if you are an investory looking for quick financing. Here’s a quick rundown of how hard money loans work:
