How To Know What Kind Of Hard Money Loan You Need

In today's economy, getting a bank or institutional loan for commercial property or for residential investment properties can be problematic. When determining whether to lend money or not, banks take into account a lot of factors and it can also take forever to find and get a loan from loan brokers. Between the reticence of banks to loan funds and the length of time it can take for a loan broker, a residential or commercial hard money loan can be your very best option to take.

You do have options to choose from to fit your needs and many can come from these 9 different types of hard money loans.

1. Hard money acquisition loans are used to purchase a specific property, typically improved property or platted land. These loans are perfect when banks can't get the funds to you in time to complete a deal, if the property isn't up to an institutional lender's standards or there's an issue with credit or liquidity.

2. You can use value added loans to increase your cash flow by renovating a property that has higher than normal vacancy rates. This loan is great to use if the income the property is generating could potentially be higher.

3. A good way to buy land for improvement is a hard money land aquisition loan. A hard money loan may be your best bet since many banks and other lendors, including many private lenders aren't currently financing many land deals.

4. Bridge loans are a great way to get from point A to point B in a financial situation. You can use these short term loans while you are waiting for financing through a bank to purchase a property. Instead of risking the chance of loosing a property by having to wait months for a bank loan, these loans can be closed on in a few weeks.

5. Construction pay off loans is designed to help contractors who have finished a property but it hasn't sold yet. This loan is used to pay off the existing construction loan so the developer avoids losses and doesn't have to short sell the property.

6. To keep property from going into foreclosure, many can get foreclosure prevention loans. Because of the damage this can do to a borrower's credit, a hard money loan can be the key to them keeping the property and keeping their credit good.

7. For help in bankruptcy, you can get a DIP or debtor in possession loan. For those who have had to file Chapter 11, this type of hard money loan enables them to get real estate out of bankruptcy court so it can be sold.

8. For those from other countries that want to purchase real estate in America and cannot get a loan from a bank, Foreign National hard money loans can help. A private lender is much more likely to fund a loan for them whereas a traditional source usually won't.

9. Takeout loans or standby commitments are for contractors who want to secure funding from a bank for property development. Having a commitment of a hard money loan may be required before many banks will give a construction loan once the property is complete.

Both borrower's and contractors can use these options as leverage in their favor. A hard money loan is a lot quicker and easier to get because you may not can get a standard loan from traditional lenders . If you're in need of a loan for a real estate deal, take a look at a hard money loan and the hard money loan rates. It may make the entire deal come together.


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Research is the best thing you can do if you need a residential investment or commercial hard money loan for your business. Dale Klein needed to know the current hard money loan rates so he could expand his office space.