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Hard money loans are predominantly asset-based, collateralized by the property in question. Investors prioritize the value of the asset over the borrower's credit and financial history. Although a borrower's creditworthiness plays a significant role in setting interest rates, loan amounts, and terms, the qualification for these loans is primarily based on the lender's specific underwriting criteria.

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What are hard money loan requirements?

Experience is crucial in determining loan amounts, interest rates, and associated underwriting fees. Real estate investors who consistently engage in the market often receive greater loan leverage compared to newcomers.
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Thus, partnering with seasoned real estate investors is beneficial for gaining expertise in property valuation, renovation, construction cost estimation, permitting, invoicing, evaluating licensed contractors, and ensuring compliance with building codes.

Having a clean criminal record can expedite the approval process for real estate investors. While some hard money lenders may disregard certain questionable aspects of a prospective borrower's background, these issues can sometimes cause delays in the loan approval process.

Finally, ensure you save at least 25% of the total project cost to commence renovation or construction as soon as your hard money loan is finalized.