A private money or hard money loan has much lighter documentation than a bank loan. Depending on the hard money lender, some will require more items to close than others. Below is a list of the most common documents required to close a hard money loan:
- Purchase contract if it’s a purchase loan. If it’s a refinance loan, you’ll need a payoff statement from the existing lender.
- Preliminary Title Report to show clear Title to the property. The designated title company for the loan will provide this.
- 2 Forms of Identification if the borrower is an individual. If the borrower is a business entity, corporate documents or operating agreement. A Certificate of Good Standing with the Secretary of the State for the entity can also be required, if borrowing as a business entity.
- Proof of funds statement if it’s a purchase loan. The private money lender wants to see that the borrower has enough funds for the down payment. A recent bank statement or other account statement(s) is usually sufficient.
- Proof of Insurance for property being purchased or refinanced.
- Optional Items can include a loan application, credit report, copy of lease and/or rent roll if a rental property.
Because each hard money lender has it’s own list of documents required to close a loan, please verify in advance of being pre-approved for the loan. This will save you time and help you get your hard money loan closed more quickly.