Hard Money Lenders Seattle: Quick Loan Approvals
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Joseph Gordon EditorJoseph Gordon is an Editor with HomeLight. He has several years of experience reporting on the commercial real estate and insurance industries.
Looking to fund your next real estate project in Seattle with a hard money loan? These loans are a great alternative to traditional financing, especially for short-term projects or those with credit issues.
In this guide, we’ll break down how hard money loans work in Seattle, their costs, and alternative financing options. Plus, we’ll highlight top local lenders to help you decide if this financing option aligns with your real estate goals.
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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 offering short-term loans secured by real estate. Unlike traditional lenders, who emphasize the borrower’s creditworthiness, hard money lenders will prioritize the property’s value. They often work with house flippers and those buying rental properties needing quick access to funds.
Hard money lenders use after-repair value (ARV) — the estimated value of a property after renovations — to determine loan amounts. They typically lend a percentage of the ARV to ensure the investment’s profitability.
Interest rates for hard money loans range from 8% to 15% or more, with repayment periods of 6 to 24 months. Borrowers also face costs like origination fees, closing costs, and points. If a borrower fails to repay, the lender can seize the property to recover their investment.
How does a hard money loan work?
A hard money loan might be the right choice for you if you are an investory looking for quick financing. Here’s a quick rundown of how hard money loans work:
- Short-term loan: These loans typically have a repayment period of 6 to 24 months, unlike the lengthy 30-year terms of conventional mortgages.
- Faster funding option: Hard money loans can be approved within days, compared to the usual 30 to 50 days for traditional mortgage loans, making them ideal for quick deals.
- Less focus on creditworthiness: Instead of scrutinizing your credit score and income, these lenders focus more on the property’s value.
- More focus on property value: These loans use the property as collateral, with approval based on the loan-to-value ratio, emphasizing the asset’s worth.
- Not traditional lenders: Hard money loans come from private investors or companies, not conventional banks, offering a different approach to financing.
- Loan denial option: Individuals with significant home equity but poor credit, who have been denied a mortgage, often turn to hard money loans.
- Higher interest rates: These loans come with higher interest rates due to the increased risk involved.
- Might require larger down payments: Borrowers might need a bigger down payment, often around 20%–30% of the property’s value.
- More flexibility: With fewer regulations, hard money lenders in Seattle can offer flexible terms, including credit scores and debt-to-income (DTI) requirements, and provide solutions to avoid foreclosure.
- Potential for interest-only payments: Some hard money loans offer the option of interest-only payments initially, providing financial flexibility at the start.
What are hard money loans used for?
Hard money loans serve specific purpose, unlike traditional loans. These loans are often sought by those requiring swift funding or who face challenges with traditional lending criteria. Here’s how hard money loans can be utilized:
Flipping a house: For investors in Seattle aiming to flip homes, hard money loans provide quick financing to purchase and renovate properties. This speed allows investors to buy, improve, and resell homes efficiently, capitalizing on market opportunities.
Buying an investment rental property: Investors targeting rental properties benefit from hard money loans by securing funding to acquire and refurbish properties swiftly. These loans enable landlords to make immediate renovations and start earning rental income sooner.
Purchasing commercial real estate: Quick access to funds makes hard money loans ideal for commercial real estate transactions in Seattle. Their flexibility and rapid approval process are crucial for investors needing to act fast to secure prime commercial properties.
Borrowers who can’t qualify for traditional loans: Individuals with substantial home equity but who struggle with credit issues often turn to hard money loans. These loans prioritize the property’s value over the borrower’s credit score, offering a viable financing alternative.
Homeowners facing foreclosure: Those nearing foreclosure may use hard money loans to refinance their debts or delay the foreclosure process. This option provides homeowners with additional time to sell their property and avoid the negative impacts of foreclosure on their credit.
How much do hard money loans cost?
The cost of hard money loans is higher than traditional loans due to the increased risk and quick funding. Here are some typical costs associated with hard money loans:
- Interest rates: These can range from 8% to 15%, depending on the lender’s risk assessment.
- Origination fees: Lenders may charge 1% to 5% of the total loan amount as an origination fee.
- Closing costs: Additional fees at closing can include legal fees, appraisal fees, and other administrative fees.
- Points: Lenders might charge points (a percentage of the loan amount) upfront, which can add to the initial cost.
There are many online calculators available to estimate your costs.
Alternatives to working with hard money lenders
If you’re a homeowner, rather than an investory, and you’re seeking alternatives to hard money loans, here are a few options to consider:
- Take out a second mortgage: If you have substantial equity in your home, a home equity loan or home equity line of credit (HELOC) can provide needed funds at lower interest rates than hard money loans.
- 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: A personal loan from family or friends can offer flexible repayment terms and potentially lower or no interest rates, making it a more affordable option.
- Use a government-backed loan program: Programs offered by the FHA, VA, or USDA can assist in purchasing homes with lower down payments and reduced interest rates.
- Peer-to-peer loan: These loans are provided by individual investors through lending platforms, functioning similarly to hard money loans but often with different terms.
- Specialized loan programs: Consider specialized loans for fixer-uppers or investment property refinancing if you already have a hard money loan and seek to replace it.
- Request a seller financing option: In some cases, sellers may agree to finance the purchase themselves, which can result in lower closing costs and less stringent eligibility requirements.
How to buy before you sell
If you’re a Seattle homeowner wanting to buy a new home before selling your current one, HomeLight offers an innovative solution that streamlines the process.
The Buy Before You Sell (BBYS) program allows you to leverage the equity in your existing home to make a stronger, non-contingent offer on a new property. If your home qualifies, you can get your equity unlock amount approved in 24 hours or less, with no cost or commitment required. Once approved, you can confidently purchase your next home and then sell your current one vacant, avoiding the hassle of moving twice.
Here’s how HomeLight Buy Before You Sell works:
Although there’s a flat fee of 2.4% of your current home’s sold price, the potential savings you could see in other areas might outweigh the cost. For example, you might save on moving expenses, temporary housing, and even the final purchase price of your new home. On top of that, HomeLight’s BBYS fees are typically much lower than the interest rates on bridge loans, which currently range from 9.5% to 12%.
3 top hard money lenders in Seattle
Traditional lenders may not always suit every real estate investment. If you need to move quickly to take advantage of a valuable opportunity, consider partnering with one of these top-rated hard money lenders in Seattle.
Certain Lending
Certain Lending, based in Seattle, WA, is designed for real estate investors, with financing that can close in as little as five days. They provide tailored products for various investment strategies, including fix and flip, bridge, construction, rental properties, short-term rentals, and rental portfolios.
Lending clientele: Real estate investors
Loan criteria:
For fix & flips: Up to 92.5% loan to cost; 100% financing of renovation
For rentals: Up to 80% LTV; 75% for cash-out
Certain Lending, holds a Google rating of 5.0 based on more than 50 reviews. Customer reviews highlight their professionalism, responsiveness, and competitive rates.
833-747-3927
Veristone
Veristone, located in Kirkland, Wash., offers hard money loan programs for land development, fix & flip projects, construction, and bridge loans. Veristone’s loans can close in a few days.
Lending clientele: Real estate investors
Loan criteria: Up to 80% LTV
Veristone holds has a Google rating of 4.7 based on more than 90 reviews. Reviews not the company’s professionalism and experience.
425-828-9800
Flynn Family Lending
Flynn Family Lending offers a range of creative financing solutions for real estate investors, including second deeds of trust, cross-collateralization, and seller-financed deals. Their loans can close in as few as 10 days, with minimal document requirements and no need for credit or income verification in most cases.
Lending clientele: Real estate investors
Loan criteria: 65-70% LTV
Flynn Family Lending holds a Google rating of 4.7 based on more than 20 reviews.
833-359-6648
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 Seattle?
Deciding whether to use a hard money lender in Seattle depends on your situation and real estate investment goals. Hard money loans are perfect for quick-turnaround projects or when traditional financing isn’t feasible. If you can manage higher costs and shorter repayment terms for the benefit of fast, flexible funding, a hard money loan might be suitable for your next Seattle investment.
For homeowners wanting to tap into their home’s equity, HomeLight’s Buy Before You Sell program offers a practical alternative. You’ll pay a small flat fee instead of high interest rates, enabling a competitive offer and a smoother transition.
Always consider your long-term strategy and consult with a financial advisor to ensure it fits your overall goals. To connect with investor-friendly real estate agents in Seattle who have access to reliable hard money lenders, let HomeLight match you with top professionals in your area.
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