Obtaining a Utah hard money loan shares some similarities with obtaining conventional financing, including the need to submit an application to your lender. Among the many things that make hard money different is that applications tend to be shorter and less involved. You also do not need a ton of supporting paperwork. But you still need to make sure all your ducks are in a row at the time you apply.

There are never any guarantees in financial services. But that said, there are things you can do that will greatly increase your chances of being approved for a Utah hard money loan. Some of those things are described below. If you are new to hard money, the best thing you can do is educate yourself about the process. If you’re a seasoned borrower though, you already know the routine.

1. Put Together a Serious Downpayment

At the top of the list is having a serious downpayment. Hard money lenders are known for requiring higher downpayments than conventional lenders. There are multiple reasons for this. First, the amount of money you have to put down demonstrates your financial strength. Second, the size of your downpayment demonstrates your seriousness.

Most importantly, hard money lenders require significant downpayments in order to ensure that borrowers have some skin in the game, so to speak. This distributes the risk more evenly so that the lender isn’t holding most of the bag. How much will you need? That depends on the lender. Just expect it to be more than what a conventional lender might want.

2. Get Your Paperwork Together

Utah hard money loans require significantly less paperwork than their conventional counterparts. But less paperwork doesn’t mean zero paperwork. You are still going to need some documentation along with your completed application. The exact documentation will depend on your plans for the loan.

In a typical real estate investment transaction, documentation often includes:

• a purchase/sale agreement.
• recent photographs of the property.
• a copy of the most recent appraisal, if available.
• rent roll and copies of existing leases (where applicable).

The exact documents will vary from one loan to the next. Just ask your lender what you will need. Get all that paperwork together and submit it at the same time.

3. Make Sure You Have an Exit Plan

Hard money loans are short-term loans with terms generally ranging from 3 to 24 months. Needless to say you won’t be making monthly installment payments over 30 years. That being the case, your lender will expect you to have some sort of exit plan at the time you apply.

For example, we once financed the purchase of a multi-unit apartment complex after the client’s original lender backed out of the deal. His exit plan was simple: after completing the purchase he would arrange conventional financing based on the value of the property and its rental income. Conventional financing allowed him to repay the hard money loan on time.

Exit plans can take many forms. There is no single right way to exit a hard money loan. Whatever your plan is though, it should be reasonable and doable. Your lender will need to know that you have thought this through and that your planned exit is viable.

Fast Approval and Funding

The idea behind making sure all your ducks are in a row reaches further than just making sure your loan application is approved. It is also about fast approval and funding. When everything lines up just as it should, we can get loans approved and funded in a matter of days.