When traditional banks say “no,” hard money loans can be a powerful tool to unlock funding fast — especially when time, credit, or property type are standing in the way. Whether you’re an investor, a homeowner, or a borrower facing a tight deadline, understanding what hard money is and when to use it can open doors to real estate opportunities you didn’t think were possible.
At Hopkins Financial Services, we’ve been helping borrowers navigate the world of private lending for over 40 years. Here’s your beginner’s guide to hard money — what it is, how it works, and when it might be right for you.
What Is a Hard Money Loan?
A hard money loan is a short- to mid-term loan secured by real estate. Unlike traditional mortgages that focus heavily on your credit score, income, and tax returns, hard money lenders base approval primarily on the value of the property (or properties) securing the loan.
In short:
It’s asset-based lending — not income-based.
It’s faster — many hard money loans close in days or weeks, not months.
It’s flexible — great for non-conforming borrowers and unique properties.
Who Uses Hard Money Loans?
Hard money loans aren’t just for developers or big-time investors. Here are just a few examples of who might benefit from hard money:
Real estate investors needing fast funding for flips or rental purchases.
Self-employed individuals who can’t show consistent income on paper.
Borrowers with credit challenges, bankruptcies, or recent life events.
Homeowners in need of quick bridge financing to avoid losing a deal.
Buyers of unique or rural properties that banks won’t touch.
Business owners looking to unlock capital using their real estate.
When Should You Consider a Hard Money Loan?
Hard money loans are often used when:
- Time is of the essence — you need to close fast.
- The property type is non-conforming (e.g., mobile home on foundation, mixed-use, rural, etc.).
- You’ve been turned down by banks due to credit score, income history, or property type.
- You’re buying a property at a discount but need cash now to secure it.
- You need to bridge the gap between buying a new property and selling your old one.
What Are the Typical Terms of a Hard Money Loan?
At Hopkins Financial, we tailor every loan to the borrower’s needs and the real estate involved. But here’s a general idea of what to expect:
| Term | Typical Range |
| Loan Amount | $40,000 to $5,000,000+ (residential and commercial) |
| Loan-to-Value (LTV) | Average 65% to 75% |
| Interest Rates | Average 10% to 12%+ (based on current market rates) |
| Loan Term | 6 months to 30 years (depending on loan type) |
| Closing Time | 7 to 30 business days (sometimes faster) |
| Prepayment Penalties | Depends on the loan — short-term loans often have none. |
Benefits of Hard Money Loans
Speed: Get funding in days, not weeks.
Flexibility: More underwriting flexibility than traditional banks.
Creative Structures: Use cross-collateralization, land-only loans, and more.
No Prepayment Penalties (in many cases): Pay it off early with no extra fees.
Real Estate Focused: Your property works harder for you — not your tax returns.
Risks and Considerations
Like any loan, hard money comes with trade-offs:
- Higher interest rates than traditional bank loans.
- Shorter terms, which means you need a solid exit plan.
- Equity requirement: Most lenders require 30%+ equity or down payment.
But for many borrowers, these trade-offs are worth it to get the deal done or unlock capital quickly.
How to Get Started
If you’re wondering whether a hard money loan is right for you, start by asking:
- Do I have real estate I can use as collateral?
- Do I need funding quickly?
- Have I hit a wall with traditional lenders?
- Do I have a solid plan for repayment or refinancing?
If the answer to any of these is yes, you might be a strong candidate for private money financing.
Why Choose Hopkins Financial Services?
At Hopkins Financial, hard money is not a last resort — it’s a strategic tool. We’ve funded over $1 billion in loans and transactions since 1984, helping borrowers like you make bold real estate moves when the clock is ticking or traditional lenders can’t deliver.
With straight talk, fast timelines, and no unnecessary hoops, we’re here to help you succeed — not slow you down.
Let’s Talk About Your Deal
Ready to explore your funding options?
Reach out to our team today and let’s see if hard money is the right move for your next real estate opportunity.
Contact Us at 208-HOP-KINS (208-467-5467).
