when choosing a hard money lender there are certain areas you ll want to pay attention to take a look at the interest rate and shop around for the lowest one you can find also look for lenders that provide you with a few loan options you ll also want to get an idea of the time to close from the lender the shorter the better accessibility and customer service should also play a role in your decision 
hard money lending can be viewed as an investment there are many who have used this as a business model and actively practice it special considerationsthe cost of a hard money loan to the borrower is typically higher than financing available through banks or government lending programs reflecting the higher risk that the lender is taking by offering the financing however the increased expense is a tradeoff for faster access to capital a less stringent approval process and potential flexibility in the repayment schedule advantages and disadvantages of a hard money loanas with any financial product there are advantages and disadvantages to hard money loans these loans are quick and easy to arrange and have high loan to value ltv ratios but also high interest rates one advantage to a hard money loan is the approval process which tends to be much quicker than applying for a mortgage or other traditional loan through a bank the private investors who back the hard money loan can make decisions faster because the lender is focused on collateral rather than an applicant s financial position lenders spend less time combing through a loan application verifying income and reviewing financial documents for example if the borrower has an existing relationship with the lender the process will be even smoother hard loan investors aren t as concerned with receiving repayment because there may be an even greater value and opportunity for them to resell the property themselves if the borrower defaults since the property itself is used as the only protection against default hard money loans usually have lower ltv ratios than traditional loans around 50 to 75 vs 80 for regular mortgages though it can go higher if the borrower is an experienced flipper also the interest rates tend to be high for hard money loans the rates can be even higher than those of subprime loans another disadvantage is that hard loan lenders might elect not to provide financing for an owner occupied residence because of regulatory oversight and compliance rules 