How to Get a Hard Money Loan Approval

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Hard money means the form of money that is always backed by precious commodities like gold, platinum, and silver. In these inflationary times, hard money loans are a must to get through this taxing phase of the economy. What are these loans and how to get approval from Houston lenders?


Hard money loans generally carry a high-interest rate as they are riskier for Houston lenders. Such privately funded debt is always secured against real property. The main purpose of approaching these lenders is to acquire capital in a jiffy and without the tedious paperwork that banks ask for. The terms and conditions of repayment can also be negotiated.

What is Needed to Get Approval?

Firstly, the valuation of the property is more important than your credit score. You may want to look for appropriate Houston lenders. On average, most loans are financed up to 60-70% of the property value. Even if you are not selling the property, you should sell its valuation to get financed easily. Whenever lenders view the potential upsides of collateral, they can accept the risk of lending you hard money. 

Being open and disclosing the purpose of the capital requirement will never hurt your chances. Competent and well-versed individuals are more likely to be financed. Although a credit score is not a must, having creditworthiness is appreciated. A history of none or few defaulting payments is beneficial. 

Often, lenders have multiple clients they can finance. Having pre-acquired knowledge and legal papers works in favor of the chances of getting a hard money loan. At the same time, property insurance is an exceptional tool not only to ensure your property but also to make a better case for yourself when pitching to get financed. Your debt financier is going to prefer having collateral that has been insured against damages. It only makes it simple for the financier to retrieve his amount. 

Downpayments are not so high for hard money loans. You must, however, have a generous amount of bank balance to finance the costs of repairs which is usually 20-30% of the property value. This requirement is so because lenders ideally want to have a sense of security that you will be able to repay both the principal and the interest thereupon. They do not wish to rely on refinancing to pay back their loans. Hence, you must take measures to maximize your cash inflow.

The crux of the matter is to first get a good lender to borrow from. Make sure that you only select reputable ones with healthy goodwill. Having knowledge about real estate might be the final wall between you and the debt amount. If your comprehension of the market is in place, approval is not going to be difficult.


Whether your purpose is commercial or you are simply purchasing your first home, the tenure of the hard money loans must be kept in mind before seeking capital. Houston lenders will definitely help you attain what you aspire to from your purpose.

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