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Hard Money Lenders West Virginia: What to Know
HomeLight
Real Estate
3 months ago
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Finding the right financing in West Virginia’s real estate market can be a challenge, especially if traditional lenders aren’t an option. A hard money loan provides an alternative solution for real estate investors, house flippers, and others needing quick access to capital. Unlike conventional mortgages, these loans offer more flexibility and faster funding, which can be particularly helpful in West Virginia, where timing is everything.

Understanding hard money loans is essential if you’re considering investing in property in West Virginia or tackling a home renovation project.

We’ll break down how these loans work, who they’re suited for, and what to expect regarding costs. Plus, we’ll explore some alternatives and introduce you to a few top-rated hard money lenders in the area to help guide your decision.

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What is a hard money lender?

Hard money lenders offer short-term financing solutions to clients who need quick cash, typically for real estate investments. Their clients often include house flippers and individuals investing in rental properties who need funding to complete their projects. Instead of focusing on credit scores, hard money lenders base loan amounts on the after-repair value (ARV) of the property. ARV represents the estimated value of the property after renovations are completed.

These loans come with higher interest rates and fees than traditional mortgages because they carry more risk for the lender. Borrowers can expect rates between 8% to 15%, and fees like origination fees are usually 1% to 5% of the loan amount. If a borrower fails to repay the loan, the lender can seize the property as collateral, making it essential to understand all the terms before committing.

How does a hard money loan work?

A hard money loan in West Virginia is a unique financing option that operates differently from traditional mortgages. Here are the key features that set it apart:

  • Short-term loan: These loans typically have terms ranging from 6 months to a few years, much shorter than a 30-year mortgage.
  • Faster funding option: Hard money loans are known for their quick approval and funding process, often closing within 30 to 50 days.
  • Less focus on creditworthiness: Hard money lenders are less concerned with your credit score, and more focused on the value of the property.
  • More focus on property value: The primary consideration for hard money lenders is the property’s loan-to-value ratio and its potential for increasing in value after renovations.
  • Not traditional lenders: These lenders are typically private individuals or companies, not banks or credit unions, giving them more flexibility to fund unconventional deals.
  • Loan denial option: If the lender feels the property won’t provide enough security, they can deny the loan, even if the borrower meets other requirements.
  • Higher interest rates: Hard money loans usually come with higher interest rates, often ranging between 8% to 15% or more, to compensate for the increased risk.
  • Might require larger down payments: These loans may require down payments of 20%–30% or more, compared to a typical mortgage down payment.
  • More flexibility: Hard money lenders can adjust loan terms, interest rates, and repayment schedules more easily than traditional lenders, offering greater flexibility in financing terms.

Potential for interest-only payments: Some hard money loans may allow borrowers to make interest-only payments for part or all of the loan term, with the principal due at the end.


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