Underwriting Guidelines for Hard Money Loans

Underwriting Guidelines for Hard Money Loans Are Less Strict Than Traditional Lenders, but You Must Meet Certain Criteria

If you’re like most of our applicants, you’re probably new to hard money loans, so there are some things you’ll need to know before you get started. Like a traditional loan from your local bank, you’ll need proof of income, decent credit, and a good work history. The big difference between a traditional lender and Capella Mortgage is we’re willing to look at the whole picture when deciding if you qualify for a loan with us. Try getting that at your local bank.

Loan officer describing underwriting guidelines for hard money loans

What’s Required From Borrowers on Our Hard Money Programs?

Borrowers who don’t qualify for a loan with traditional lenders find hard money loans to be a great option. When they compare us to a regular bank, they find our guidelines aren’t nearly as strict as the banks. Since we’re a private lender, our investors decide who we lend to, not board members.

Still, as a licensed broker, Capella follows all rules and regulations regarding mortgages and private lending. Before we can approve your mortgage, we’ll need information about you and the subject property.

During the application process, all applicants will be required to provide the following information:

  • What is the reason for the loan? Is it a purchase or refinance?
  • Your ability to repay the loan will be verified.
  • We’ll ask to see your tax returns for the last two years.
  • You’ll need a copy of your most recent bank statement.
  • If you’re a full-time employee, we’ll need last year’s W2.
  • We’ll also need a copy of your last paycheck.
  • The Investors will want to know the property description, condition, and value (not an appraisal).

Application being denied due to underwriting guidelines for hard money loans

What Isn’t Allowed When Applying for A Hard Money Loan?

Capella is committed to getting funding for our Borrowers which you should realize by now. However, it should also be clear that we won’t loan money to just anyone.

As you can see, our applicants at Capella must provide information on their income and ability to repay a loan, and the property must meet specific criteria.

So even though the guidelines at Capella aren’t as strict as traditional lenders, there are some restrictions that we must still abide by like:

  • The subject property can’t be extremely distressed or condemned.
  • We don’t offer 2nd mortgages behind large first-lien positions.
  • Convicted, violent offenders, will not be approved by Capella for a loan. Capella performs a background check on each of our applicants.
  • Borrowers who are delinquent on court-ordered child support payments will not qualify for a hard money loan per government regulations.
  • Capella will deny any loan application which violates the Dodd-Frank act in any way.

Capella Mortgage is confident we can get you a loan as long as we can verify your information and the property meets the minimum criteria. Hard money loans at Capella aren’t challenging to qualify for, and we’re willing to help, but the loan must make sense.

If you’re ready to apply for a hard money loan, complete our easy Hard Money Loan Application.

Proudly Serving: Nevada, California, Arizona, New Mexico, Texas, & Colorado – NMLS #372157

Call Capella Mortgage today! (702) 214-4700