Hard Money Lenders NY: Quick, Flexible Loans
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Kelsey Morrison Former HomeLight EditorClose
Kelsey Morrison Former HomeLight EditorKelsey Morrison worked as an editor for HomeLight's Resource Centers. She has 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.
Looking for a way to fund your next real estate project in the State of New York? Whether it’s renovating a historic property in Saratoga Springs or expanding your investment portfolio in Binghamton, hard money lenders in NY offer the financial flexibility you need. Hard money loans provide a quick funding solution based on the property’s value rather than your credit score or income history.
If you’re not a real estate investor but need to bridge the timing gap between buying and selling a home, we’ll explore alternative options that allow you to leverage your home equity. This article will guide you through the essentials of hard money lending in NY, helping you determine if this type of loan suits your real estate needs.
Start Making Offers Without Waiting to Sell Your Home
Through our Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency.
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 loans secured by real estate. Unlike traditional banks, hard money lenders in NY focus on the property’s value rather than the borrower’s credit history. They often work with house flippers and investors purchasing rental properties who need quick, flexible funding.
Hard money lenders determine loan amounts based on the after-repair value (ARV), which is the estimated value of a property after renovations are complete. Typically, they lend a percentage of the ARV to ensure the investment is profitable and to reduce risk.
These loans come with higher interest rates, usually between 8% and 15%, and additional fees like origination fees, closing costs, and points. Failure to repay a hard money loan can result in the lender foreclosing on the property to recoup their funds.
How does a hard money loan work?
For New York real estate investors looking for speed and flexibility, hard money loans are an enticing option. Here’s a brief overview of how they work:
- Short-term loan: Typically, these loans are repaid over 6 to 24 months, unlike the lengthy 15- or 30-year conventional mortgage terms.
- Faster funding option: Hard money loans can be approved and funded within days, much faster than the 30 to 50 days usually needed for mortgage loans.
- Less focus on creditworthiness: Your credit score is less important than the property’s value in the approval process.
- More focus on property value: These loans are secured by the property’s loan-to-value ratio, rather than the borrower’s credit.
- Not traditional lenders: Hard money loans come from private investors or lending firms, not traditional banks.
- Loan denial option: Ideal for those with significant home equity who have been denied conventional mortgages due to poor credit.
- Higher interest rates: These loans carry higher interest rates to compensate for the greater risk.
- Might require larger down payments: Borrowers might need a down payment of up to 20%–30%, depending on the property’s value.
- More flexibility: Hard money lenders can offer more flexible terms, including lenient debt-to-income ratios.
- Potential for interest-only payments: These loans may allow for initial interest-only payments or deferred payment options.
What are hard money loans used for?
Hard money loans can be a flexible financing option for various real estate projects in New York. Investors and homeowners alike benefit from these loans when traditional financing isn’t an option. Here are some common situations where a hard money loan might be helpful:
Flipping a house: For New York investors involved in flipping homes, hard money loans provide immediate funds for purchasing and upgrading properties. This allows investors to quickly buy homes, complete renovations, and sell them at a profit.
Buying an investment rental property: Those looking to buy rental properties can use hard money loans to acquire properties that need fast repairs. These loans help landlords quickly get properties ready for tenants and start earning rental income.
Purchasing commercial real estate: Hard money loans are ideal for commercial real estate deals where speed and flexibility are essential. They help investors act on time-sensitive opportunities that might be missed with traditional financing.
Borrowers who can’t qualify for traditional loans: Individuals with significant home equity but poor credit often find hard money loans to be a viable alternative. These loans focus on the property’s value, offering financing options when traditional loans aren’t available.
Homeowners facing foreclosure: Homeowners on the brink of foreclosure may use hard money loans to refinance their debts or buy time to sell their property. This temporary solution can help avoid foreclosure and the negative impact it has on credit reports.
How much do hard money loans cost?
The higher costs of hard money loans reflect the quick, less restrictive funding they offer. Typical costs include:
You can use online calculators to get an estimate of these costs.
Alternatives to working with hard money lenders
For homeowners seeking ways to leverage their home’s equity, here are several alternatives to consider:
Take out a second mortgage: Utilizing a home equity loan or HELOC can provide funds at a lower interest rate compared to hard money loans.
Cash-out refinance: This option allows you to refinance your mortgage, drawing out cash to invest in other projects, often with lower interest rates.
Borrow from family or friends: Personal loans from family or friends can offer more lenient terms and lower or no interest, making it a cost-effective choice.
Use a government-backed loan program: Government-backed programs, including FHA, VA, or USDA loans, can help with lower down payments and interest rates.
Peer-to-peer loans: These loans are provided by individual investors through lending platforms, functioning similarly to hard money loans but often with different terms.
Specialized loan programs: Explore specialized loans for property renovations or refinancing to replace existing hard money loans.
Request a seller financing option: Some sellers may agree to finance the sale themselves, resulting in lower closing costs and more lenient requirements.
How to buy before you sell
Picture this: A home that checks all of your boxes hits the market unexpectedly. Perhaps it’s a lakeside cottage in the Finger Lakes or a downtown condo in Albany. Thankfully, HomeLight offers an innovative solution that allows you to buy a new home before selling your current one.
The Buy Before You Sell (BBYS) program lets you leverage your existing home’s equity to make a stronger, non-contingent offer on a new property. Qualifying homes can get their equity unlock amount approved in less than 24 hours, with no cost or commitment required. This approval allows you to purchase your next home with confidence and sell your current one vacant, avoiding the hassle of moving twice.
Here’s how HomeLight Buy Before You Sell works:
While there’s a flat fee of 2.4% of your current home’s sold price, the potential savings can offset this cost. Savings on moving expenses, temporary housing, and potentially the purchase price of your new home can make this program worthwhile. Additionally, HomeLight’s BBYS fees are generally much lower than the interest rates on bridge loans, which typically range from 9.5% to 12%.
3 top hard money lenders in NY
Not all real estate investments are a match for traditional lenders. If you need to act quickly and make the most of an opportunity, explore these hard money lending options available in New York.
Hard Money Brooklyn
Hard Money Brooklyn specializes in short-term mortgages, providing hard money loans for non-owner-occupied residential and commercial properties. Serving all of New York State, they offer quick closings in as little as seven business days with loan amounts starting at $100,000. Their loan programs include commercial hard money, private mortgage money, rehab hard money, and commercial bridge loans. Hard Money Brooklyn does not charge an application fee, and there are no prepayment penalties.
Lending clientele: Residential and commercial real estate investors
Loan criteria: Short-term mortgages starting at $100,000
Hard Money Brooklyn boasts a 4.5-star rating on Google from over 30 reviews. Clients praise owner Jonathan for his exceptional customer service, reliability, and professionalism. “I had a great experience working with Hard Money Brooklyn,” shared a client. “They are a trustworthy company that provides fast and efficient service. Jon Fischer was my contact person, and he was always available when I needed him.”
718-593-4527
West Forest Capital
West Forest Capital, based in New York City, specializes in financing non-owner-occupied real estate. Their hard money loans are perfect for fix-and-flip or fix-and-refinance projects. Funding is typically secured within a week, with rates starting at 10% (interest only). Standard loan terms are one year, but two-year terms and six-month extensions are also available. West Forest Capital provides lending services throughout New York and seven other East Coast states.
Lending clientele: Residential, commercial, and development investors
Loan criteria: Up to 75% ARV (hard money loans)
West Forest Capital has a 5-star rating on Google based on a limited number of reviews. These reviews emphasize the company’s flexibility, consistent communication, and competitive rates. “Could not have asked for a better or more accommodating experience on our first hard money loan,” wrote a borrower. “They got everything set for us super quickly and efficiently and were a pleasure to communicate with.”
917-267-9523
Albany Hard Money
Founded in 2006, Albany Hard Money is the largest private money lender in the Capital Region. To date, they have funded over 1,200 loans totaling more than $100 million. Borrowers can get approved in less than 72 hours, and loan amounts range from $50,000 to $2 million with terms spanning 12 to 24 months. The company offers three types of loans: fix-and-flip, rentals, and cash-out equity. They work exclusively with real estate investors and do not lend on primary residences.
Lending clientele: Residential and commercial real estate investors
Loan criteria: $50,000 to $2 million loan amounts
Albany Hard Money touts a 4.6-star rating on Google. Clients commend their helpful and professional service, fast turnaround times, and clear communication. “Amazing company to work with, very helpful and professional,” reads a recent review. “They work closely with you they don’t just write a check and let you go. Your success is important to them.”
518-708-8221
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 NY?
Whether a hard money loan is right for you depends on your specific situation and real estate investment goals. Hard money loans are best suited for real estate investors who need quick funding or cannot secure traditional loans. If you’re comfortable with higher interest rates and shorter repayment terms in exchange for fast, flexible financing, a hard money lender in NY might be the solution for your next project.
For homeowners looking to tap into their home equity, HomeLight’s Buy Before You Sell program offers a compelling alternative. Instead of high interest rates, you pay a flat fee while benefiting from a more competitive offer and an easier moving process.
Consider your long-term strategy and consult with a financial advisor before making any major financial decisions. If you’re looking to connect with investor-friendly real estate agents in New York who have ties to trusted hard money lenders, HomeLight can help you find top professionals in your area.
Header Image Source: (Unsplash/Wenhao Ruan)
- "Bridge Loan Rates: Current 2024 Interest Rates," Vaster (October 2023)
- "What is ARV and how is it calculated?," Rehab Financial Group (June 2023)
- "What Is Loan-to-Value and Why Does it Matter?," U.S. News, Ben Luthi & Rebecca Safier (March 2024)
- "Why Do Hard Money Lenders Require A Down Payment?," RCN Capital (April 2024)
- "What Are The Costs Involved In A Hard Money Loan?," NorthWest Private Lending (March 2024)
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