Discover Hard Money Lenders in Maryland for Fast Funding
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Kelsey Morrison Former EditorClose
Kelsey Morrison Former EditorKelsey Morrison worked as an editor for HomeLight's Resource Centers with seven years of editorial experience in the real estate and lifestyle spaces. She previously worked as a commerce editor for World of Good Brands (eHow.com and Cuteness.com), and as an associate editor for Livabl.com. Kelsey holds a bachelor’s degree in Journalism from Concordia University in Montreal, Quebec, and lives in a small mountain town in Southern California.
Are you eyeing a real estate investment in Maryland but finding traditional financing options out of reach? Whether you’re hoping to revitalize a row house in Baltimore or purchase a commercial property in Annapolis, hard money lenders in Maryland offer the speed and flexibility you need. A hard money loan could be the perfect solution for those with short project timelines or challenging credit situations.
In this article, we’ll walk you through the essentials of hard money lending in Maryland, explaining how these loans work, their costs, and potential alternatives. If you’re a local investor or a homeowner looking for quick financial solutions, you’ll find valuable insights to help you make an informed decision.
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Editor’s note: This post is for educational purposes and is not intended to be construed as financial advice. HomeLight always encourages you to consult your own advisor.
What is a hard money lender?
A hard money lender is a private individual or company that provides short-term, asset-based loans secured by real estate. Unlike traditional banks, hard money lenders in Maryland focus on the property’s value rather than the borrower’s credit score. Their primary clients are real estate investors, such as house flippers and those purchasing rental properties, who need quick access to funds and flexible terms.
Hard money lenders use the after-repair value (ARV) — the estimated value of the property after renovations — to determine the loan amount. Typically, they lend a portion of the ARV to ensure the investment is profitable and reduce their risk.
Interest rates for hard money loans are higher, ranging from 8% to 15%, with additional costs like origination fees and points. If a borrower fails to repay the loan, the lender can seize the property to recover their investment.
How does a hard money loan work?
For real estate investors in Maryland, hard money loans offer a unique blend of speed and flexibility. Let’s take a closer look at how these loans work:
- Short-term loan: Hard money loans typically come with a repayment period of 6–24 months, unlike the standard 15- or 30-year mortgage terms.
- Faster funding option: These loans can be approved and funded within days, much quicker than the usual 30 to 50 days for a conventional mortgage.
- Less focus on creditworthiness: Hard money lenders prioritize the property’s value over the borrower’s income history or credit score.
- More focus on property value: The loans are secured by real estate and are based on the loan-to-value ratio of the property.
- Not traditional lenders: Hard money loans are provided by private investors or lending companies, not traditional banks.
- Loan denial option: These loans are often a choice for individuals with poor credit who have been denied traditional mortgages but hold significant home equity.
- Higher interest rates: Given the higher risk, hard money loans have higher interest rates compared to conventional mortgages.
- Might require larger down payments: Borrowers may need to provide larger down payments, sometimes ranging from 20%–30%.
- More flexibility: Hard money lenders in Maryland can offer flexible terms and conditions, including adjustable debt-to-income ratios and credit score requirements. These loans can also help some homeowners avoid foreclosure.
- Potential for interest-only payments: Hard money loans may include options for interest-only or deferred payments initially, offering more payment flexibility.
What are hard money loans used for?
In Maryland, hard money loans cater to unique financing needs that traditional loans often can’t meet. They provide fast, flexible funding solutions for a variety of real estate situations. Ahead, we’ll explore some common uses for hard money loans:
Flipping a house: Maryland house flippers benefit from hard money loans because they are fast and accessible. These loans allow investors to quickly buy and renovate properties, making it easier to improve and resell homes efficiently.
Buying an investment rental property: Hard money loans are ideal for investors looking to purchase rental properties quickly, especially those that require renovations. They provide the necessary funds to buy and renovate properties, getting them rental-ready faster than traditional loans.
Purchasing commercial real estate: These loans are also popular in the commercial real estate sector for their flexibility and fast processing times. Investors can act quickly when they come across a valuable opportunity, which is crucial in competitive markets.
Borrowers who can’t qualify for traditional loans: People with significant home equity but poor credit often turn to hard money lenders in Maryland. These loans are based more on the property’s value than the borrower’s credit score, making them accessible to those who might otherwise be denied financing.
Homeowners facing foreclosure: Hard money loans can be a lifeline for homeowners facing foreclosure. They can refinance existing debts or provide the necessary time to sell the property, potentially preventing the loss of their home and damage to their credit.
How much do hard money loans cost?
The cost of hard money loans is generally higher than traditional loans due to the associated risk and quick processing. Typical costs include:
Using online calculators can help estimate these costs.
Alternatives to working with hard money lenders
For homeowners seeking to tap into their home’s equity, here are several viable alternatives to consider:
Take out a second mortgage: A home equity loan or home equity line of credit (HELOC) can provide the needed funds at a lower interest rate compared to a hard money loan.
Cash-out refinance: This option allows you to refinance an existing property, pulling out cash to finance your new investment. It often comes with lower interest rates than hard money loans.
Borrow from family or friends: Personal loans from family or friends can offer more flexible repayment terms and potentially lower or no interest rates, making this a cost-effective option.
Use a government-backed loan program: Programs like those from the FHA, VA, or USDA can help purchase homes with lower down payments and interest rates.
Peer-to-peer loan: Loans from individual investors, accessed through lending platforms, offer terms similar to hard money loans but can have varying conditions.
Specialized loan programs: Explore specialized loans designed for fixer-uppers or refinancing investment properties, especially if you’re looking to transition from a hard money loan.
Request a seller financing option: Some sellers may agree to finance the purchase themselves, leading to lower closing costs and more lenient eligibility criteria.
How to buy before you sell
Finding your dream home often happens when you least expect it. Whether it’s a cozy cottage in the suburbs or a sleek downtown apartment, taking advantage of that opportunity can be challenging if you still need to sell your current house. For Maryland homeowners, HomeLight offers a seamless solution with its Buy Before You Sell (BBYS) program.
The Buy Before You Sell program allows you to leverage your current home’s equity to make a competitive, non-contingent offer on a new home. With quick approval, often within 24 hours, and no upfront costs or commitments, you can move forward with your new home purchase and then focus on selling your previous home without the pressure of simultaneous closings.
Here’s how HomeLight Buy Before You Sell works:
While the program charges a flat fee of 2.4% of your current home’s sold price, the overall savings can be significant. You’ll likely save on moving expenses, avoid temporary housing costs, and possibly negotiate a better price on your new home. Additionally, HomeLight’s BBYS fees are generally much lower than bridge loan interest rates, which can range from 9.5% to 12%.
3 top hard money lenders in Maryland
Conventional lenders may not suit every real estate deal. If you need to jump at an opportunity, think about partnering with one of these top-rated hard money lenders in Maryland.
New Funding Resources
New Funding Resources is a direct private mortgage lender based in Gaithersburg. Founded in 2006, the company offers hard money and asset-based loans to real estate investors in Maryland, D.C., and Virginia. Their hard money programs include fix-and-flip loans, bridge loans, buy-and-hold loans, non-recourse loans, and more. Listed among the eligible properties are single-family homes, multi-family properties, and commercial properties. Loans can be pre-approved in 24 hours and close in as few as three to five days.
Lending clientele: Residential and commercial real estate investors
Loan criteria: Up to 65% of ARV
New Funding Resources has a Google rating of 4.9 stars based on more than 100 reviews. Customers highlight the staff’s responsiveness, efficiency, and expertise. “New Funding Resources is an amazing lender for real estate investors,” shared one client. “They have a clear and well-defined process and were always available to discuss status.”
240-206-5355
Trius Lending Partners
Towson-based Trius Lending Partners offers both short-term and long-term loan options for real estate investors. Founded in 2003, the company funds the acquisition and rehabilitation of commercial and residential rental properties, with loans ranging from $100,000 to $2.5 million. Trius closes loans within one to 15 business days, makes all decisions in-house, and manages and services all loans directly. Short-term loans are available for properties in the Mid-Atlantic region, while long-term loans are offered nationwide.
Lending clientele: Residential and commercial real estate investors
Loan criteria: Up to 75% of ARV
Trius Lending Partners boasts a perfect 5-star rating on Google based on nearly 300 reviews. Customers routinely praise their efficiency, exceptional service, and communication. “David and Mike really came through for a client whose lender failed them four days before closing,” wrote a reviewer. “They were able to give approval in under 24 hours and cleared to close in under 48 hours!”
443-898-4090
Pimlico Capital
Founded in 2016 and based in Baltimore, Pimlico Capital provides funds for real estate investors in more than 30 states, including Maryland. They offer competitive rates and high-leverage loan options, specializing in fix-and-flip, fix-and-hold, BRRRR, and turnkey rental properties. Their competitive rates start at just 10.5% for short-term funding or 7.5% for 30-year investment loans.
Lending clientele: Residential real estate investors
Loan criteria: Up to 70% LTV (fix-and-flip), up to 75%–80% LTV (rental)
Pimlico Capital touts a 5-star rating on Google from more than 150 reviews. Customers commend their professionalism, efficiency, and excellent customer service. “My experience with Pimlico has been great, especially being a new investor,” reads a recent review. “They are timely, efficient, and provide guidance throughout the process. Highly recommend!”
410-855-4600
Investing in real estate?
Hire an investor-friendly real estate agent who can help you get access to off-market properties at a discount and assess potential rental income based on market trends. HomeLight can connect you with investment property specialists at no cost.
Should I partner with a hard money lender in Maryland?
Whether a hard money loan is the right choice for you depends on your unique circumstances and real estate goals in Maryland. These loans are particularly beneficial for investors who need to move quickly or when traditional financing isn’t available. If you can manage the higher interest rates and shorter repayment periods, hard money lenders in Maryland might provide the quick, adaptable funding you need for your next project.
However, for homeowners looking to tap into their home’s equity, consider HomeLight’s Buy Before You Sell program. This option offers a more competitive rate and a smoother transition by charging a small flat fee rather than high interest rates.
Review your long-term financial plan and consult with a financial advisor to make sure it aligns with your investment strategy. To connect with investor-friendly real estate agents in Maryland who have access to reliable hard money lenders, let HomeLight help you find the right professionals for your needs.
Header Image Source: (appalachianview/DepositPhotos)
- "Bridge Loan Rates: Current 2024 Interest Rates," Vaster (October 2023)
- "What are the Closing Costs of a Hard Money Loans?", Marquee Funding Group (January 2022)
- "What Is Loan-to-Value and Why Does it Matter?", U.S. News (March 2024)
- "Why Do Hard Money Lenders Require A Down Payment?", RCN Capital (April 2024)
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