Prequalify for a Hard Money Loan
How to Prequalify & Get Preapproved for a Hard Money Loan
It’s extremely easy – just 3 simple steps stand between you and purchasing your next (or first) investment property!
1) Submit an Online Application
It all starts by submitting this form with basic information about your financial resources and any real estate investing experience you bring to the table. Once you submit the form, one of our loan officers will review the information and reach out to you for a free
2) Free Loan Consultation
A WCP Loan Officer will reach out after reviewing the information that you have provided in the online application. If you do not already have a property in mind, your Loan Officer will discuss with you what amount of financing you may qualify for. If you already have a property in mind, your Loan Officer can underwrite the loan and present you with our best rate and terms for a hard money loan.
3) Receive your Proof of Funds
If you already have a property in mind and your Loan Officer has approved you for funding, you will receive a Proof of Funds letter to secure that property. If you have not yet found a property, you need to find one and send the property address, purchase price, estimated renovation costs, After Repair Value, and (if applicable) estimated monthly rent to your Loan Officer. If approved, you will receive your Proof of Funds letter and can proceed with purchasing the property.
Frequently Asked Questions
What do I need to prequalify for a hard money loan?
In order to prequalify you for a loan, our loan Officers will need a couple of key pieces of information about you, so you’ll need to have the following data points:
- The number (if any) of fix and flip projects that you have completed in the past
- Your current credit score
- The amount of cash you have to bring to the deal (i.e. down payment money)
- If you have a specific property in mind to fix and flip, please have as much of the following info as possible:
- Property Address
- Purchase Price
- Estimated Renovation Costs
- After Repair Value (ARV)
What is the difference between Prequalifying and Preapproval for a hard money loan?
Prequalifying for a loan is essentially a consultation between a real estate investor and a Loan Officer to determine if the investor has all of the required resources and data needed to secure a loan. During this consultation, the Loan Officer can also determine an estimate of what loan amount the investor may be able to receive, allowing the investor to shop for fix and flip projects that fit within that dollar amount.
Preapproval for a hard money loan is a commonly misunderstood concept. Because hard money loans are primarily based on the hard asset (a.k.a. the property) itself, a lender cannot give an investor a blanket approval for a dollar amount regardless of the property that the investor chooses. This means that the investor must already have a property in mind if they want to be “preapproved” for funding. Once a hard money lender analyzes and approves the property deal, they will provide a Proof of Funds letter which will allow the investor to purchase the property with financial backing by the lender. In summary, “preapproval” can only take place once an investor has presented the lender with a specific property they intend to purchase.
What happens after I prequalify for a loan?
After your prequalifying consultation with a loan officer, you should have an understanding of the price range that you can afford to secure a fix and flip project within. So the first step is to find a fix and flip project that fits within that price range. Next, you will need to calculate the estimated renovation costs and After Repair Value (ARV) of the property, and determine if that deal is profitable enough for you. After that, you will send the property address, purchase price, renovation cost, and ARV to your Loan Officer for analysis and approval. Once approved, they will provide you with a Proof of Funds letter that allows you to purchase the property with the financial backing of Washington Capital Partners.