What is Hard Money? | Bridgewell Capital
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What is Hard Money?

There are many misconceptions in the marketplace about the meaning of the term “hard money loans”. In the real estate industry, funding from a hard money lender is so called hard money lending because of the high points and interest rates. While the conventional mortgage loan from banks floats around 3%, a hard money loan can stand at around 12% APR.

Although the loan terms can be strict and the interest rates can be high, a hard money loan is usually worth the cost for the average real estate entrepreneurs needing a quick source of cash to fund their deals. While conventional loans can take weeks, if not months, to close a loan, hard money lenders only need 7 days or less. Income and employment verifications, credit checks, background checks and all the qualification parameters that are present in conventional loan processing, are not required for a hard money loan, which makes the process not only faster but easier for the investor as well.

As a way of example, let’s say you have $150,000 to invest and you want to buy a single family detached home for $130,000 that needs $20,000 worth of rehab. You would have just enough cash to do the deal, but you will not have enough cash for other deals until you have accumulated enough capital. On the other hand, if you qualify for a loan with BridgeWell, you would only need to fund as little as 10% of the total project cost, which includes purchase price, closing costs and rehab costs. You could then use the other portion of your investment capital to fund other deals and multiply your profits.

Therefore, hard money loans allow real estate investors to quickly fund their deals, do more business and boost their profits. If you would like to know more about our programs click here or submit an application for funding.

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© 2020 BridgeWell Capital All Rights Reserved. BridgeWell Capital LLC is a licensed mortgage lender. We specialize in providing capital to real estate investors throughout the U.S. BridgeWell Capital LLC reserves the right to amend rates and lending guidelines. All loan programs require qualification by the borrower and the property.