When looking for a hard money lender in New Jersey make sure to compare their reputation, location, and loan terms.  Referrals from other investors are a great way to find hard money lenders or private lenders.   Most lenders attend real estate investor groups and are regionally local.  Mortgage Brokers can also help find hard money lenders for you along with Real Estate Agents and Title Companies.  Finally, you can search for ‘hard money lenders near me’ online.   Make sure to check their online reviews and if they are local.

Hard money lenders tyically don’t have minimum credit score requirements because they do not focus as heavly on a credit score like a bank would.  Yes, many hard money lenders pull credit, but it is usually not the primary factor in their lending decisions. Unlike traditional lenders, hard money lenders focus more on the real estate property along with the property’s value and equity than the borrower’s credit score. A higher credit score can sometimes lead to better loan terms, lower interest rates, or reduced down payments. But even borrowers with low credit can still qualify if they have a good project and a solid game plan (have the ability to execute/perform on the project).

Getting a hard money loan is pretty easy and much quicker then a traditional bank or lender.    Approvals typically happen within 24 hours, and settlements can occur in less than a week. Many loans we close are within a few business days. However, remember that the lender has due diligence and underwriting to conduct depending on the overall project. This may include property inspections, ordering and inspecting title work, and drafting lender documents. Depending on the circumstances, this could take anywhere from a few hours to a week, but in a rush situation, we can speed up the process to accommodate you.

A hard money lender is a private individual or company that provides short-term loans that are asset-based secured by real estate (investment house or commercial building). Unlike traditional lenders, hard money lenders focus on the value of the property used as collateral rather than the borrower’s creditworthiness. These loans are typically used by real estate investors, house flippers, or borrowers who need quick financing and may not qualify for conventional loans. Hard money loans often have higher interest rates and shorter repayment terms due to the increased risk for the lender.

Hard money lenders require a down payment, typically ranging from 10% to 30% of the property’s purchase price. The exact amount depends on factors like how good the overall project is,  lender’s risk tolerance, credit score, the loan-to-value (LTV) ratio and the borrower’s experience. In some cases, experienced investors or those securing properties well below market value may negotiate lower down payments or even 100% financing with additional collateral.

Interest rates for hard money loans typically fall between 10% and 16%, though rates can vary based on the lender, loan-to-value (LTV) ratio, borrower experience and credit score. Points (upfront fees) usually range from 2% to 6% of the loan amount. While hard money loans have higher rates than traditional mortgages, securing a lower rate depends on other qualification factors including lower LTV ratios.

Most hard money loans require monthly payments in Delaware which are usually just interest-only payments during the term of the loan and then a balloon payment at the end of the term.

Here are some common payment structures:

• Interest-Only Payments: Common for short-term loans (ex. fix and flip loans) where you pay just the interest each month and the principal at the end.
• Monthly Payments: Amortized loans where you pay both principal and interest monthly.
• Balloon Payments: You may pay only interest monthly and make a lump sum payment of the full principal balance at the end of the loan term.

The payment structure will depend on the lender and the specific loan agreement, so it’s important to clarify the terms before signing.

Hard money loans typically have short repayment terms, usually ranging from 6 months to 3 years. However, most lenders try to structure their loans up to 1 year, depending on the borrower’s needs and the lender’s policies. Hard money loans are designed for short-term financing, often used by real estate investors for fix-and-flip projects, fix-and-hold or bridge loans.  Many borrowers that have investment residential properties and commercial buildings prefer the flexiblity of a hard money loan over tranditional lending sources.

A good interest rate for a hard money loan typically falls between 10% and 16%, though rates can vary based on the lender, loan-to-value (LTV) ratio, borrower experience and credit score. Points (upfront fees) usually range from 2% to 6% of the loan amount. While hard money loans have higher rates than traditional mortgages, securing a lower rate depends on other qualification factors including lower LTV ratios.

Most hard money lenders in Delaware that use private capital don’t require a standard appraisal. However, they may use a broker price opinion (BPO), an internal valuation, or a comparative market analysis instead of a full formal appraisal. The focus is primarily on the property’s value rather than the borrower’s credit history. Banks and institutionally backed lenders typically require a full appraisal.

The extension fee for a hard money loan varies by lender but typically ranges from 1% to 3% of the loan amount depending on how long of an extension period. Some lenders charge a flat fee, while others may apply a percentage of the remaining balance. The extension terms depend on the original loan agreement and lender policies, and additional interest or rate increases may apply. Borrowers should review their loan documents carefully to understand the specific costs associated with extending their loan.  Most lenders are ok to extend a loan in good standing and performing.