How To Choose A Hard Money Lender

How To Choose A Hard Money Lender

For real estate investors both old and new, having a reliable, trustworthy private money lender on the team is essential. Whether it’s fast financing for a new purchase or cash to handle those unexpected bumps in the road, hard money loans can make all the difference. So how does one find a reliable, trustworthy private money lender? A Google search will give you hundreds of hard money lending sites to sort through. Here’s what investors should look for when choosing:


Choose a hard money lender who has lots of experience in both real estate and hard money loans. Unlike companies that service many types of loans, an experienced hard money lender will have expertise in the specifics of private money loans, the procedures and regulations that must be followed and make the process simple, straightforward and streamlined for borrowers.

Competitive Rates and Terms

Before selecting a hard money lender, make sure the rates and terms of the loan are competitive and comparable with other lenders in your area. Rates that are too high or too low are often indicators of inexperienced or untrustworthy financiers. Remember, if it seems too good to be true, it probably is.


A good hard money lender will be able to approve and finance a private money loan fast, often within a day or two. Finding a direct money lender, one who has funds to make loans directly, will also increase the ease and speed of private money financing.


A reputable hard money lender should be clear and upfront in all communication, quotes, loan rates and terms so borrowers understand exactly what they are getting. Be aware of bait and switch tactics employed by some hard money lenders. Very low published rates are often just a strategy to entice novice investors looking for the best deal.


Choose a hard money lender that is licensed with local and state real estate bureaus and associations. Additionally, lenders who originate consumer loans should be endorsed by the National Mortgage Licensing System (NMLS).