Hard Money Lenders Utah: Quick Funding Solutions
2 min read
Are you hoping to fund your next Utah real estate project with a hard money loan? Whether you’re hoping to flip a ranch-style home in Oak Cliff or purchase a townhouse rental in Uptown, hard money lenders in Utah can provide funding flexibility and a fast turnaround for receiving funds.
Hard money loans are an alternative financing method to conventional loans and can be particularly useful if you have a short project timeline, limited capital to kickstart the project or credit issues.
If you’re not a real estate investor but still need to bridge the timing gap between buying and selling a home, we’ll share some options for leveraging your home’s equity.
Our article will explain how hard money lending works in Utah, helping you decide if this financial tool is appropriate for your real estate investment or home-buying 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 that offers short-term loans secured by real estate.
These lenders differ from traditional lenders in that conventional lenders will focus primarily on the borrower’s creditworthiness and income. Instead, hard money lenders prioritize the property’s value as collateral.
Hard money loan programs 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 use after-repair value (ARV) — the estimated value of a property after all renovations and repairs are completed — to determine the loan amount they are willing to offer. They’ll typically lend a percentage of the ARV to ensure the investment’s profitability and security.
Hard money loans typically have higher interest rates, ranging from 8% to 15% or more, 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.
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?
If you’re a real estate investor looking for a financing option that provides speed and flexibility, connecting with hard money lenders in Utah could be a good movel. Here’s a quick rundown of how hard money loans work:
