IS A DOWN PAYMENT REQUIRED FOR HARD MONEY LOANS?

If you are wondering whether hard loans require a down payment, read on to learn more. The majority of hard money lenders out there do require a down payment. They’ll take a look at your credit score, experience, and maybe a few other factors, and then calculate your down payment from there. Most often, you’ll be required to front 20% to 30% of the deal. And it makes sense why they do this:

They’re taking a risk on you. They’re assuming that you’ll be able to pull off the flip and pay back the loan with interest within the time frame they’ve established. When you pay 20% – 30% up front, it lowers their risk. Each company has their own underwriting criteria to determine risk on a deal. If they see that you have experience and a good credit score, you’ll be able to pay less money up front.So your questions about down payments and hard money loans will have various answers depending upon the lender.