What Is a Hard Money Loan?
A hard money loan is a short-term loan that uses real estate as security. It is often used when traditional financing is not an option. The approval is based on the value of the property, not the borrower’s credit.
A hard money loan is a private loan secured by real estate. It is issued by private lenders, not banks. These loans are faster to obtain than traditional loans and involve fewer requirements.
The loan term is usually short, from 6 months to 3 years. Borrowers use the property as collateral. The loan amount is based on the property’s value, not personal credit history.
Who Uses Hard Money Loans?
Hard money loans are useful for:
Real estate investors
Property flippers
Buyers with poor credit
People needing quick funds
Homeowners facing foreclosure
Dare 2 Dream helps these borrowers understand their options and connect with lenders.
How Does a Hard Money Loan Work?
Borrower applies with details about the property
Lender inspects the property and confirms the value
Lender approves based on property equity and exit strategy
Borrower receives funds quickly, often in days
Loan is repaid at the end of the term or after a sale or refinance
Key Features
Fast approval: Some loans close in less than a week
Short terms: Usually 6–36 months
Higher interest: Rates range from 8% to 18%
Upfront fees: Includes lender fees, legal fees, and appraisal costs
Loan-to-value (LTV): Usually up to 75% of property value
Dare 2 Dream explains all terms clearly before you commit.
Types of Properties Used for Collateral
Single-family homes
Multi-unit residential buildings
Commercial properties
Land or lots
Industrial properties
The property condition and market value affect the loan amount and approval speed.
Benefits of Hard Money Loans
Quick funding
Flexible terms
No personal credit check needed
Useful for time-sensitive purchases
Great for real estate investments
These loans provide fast access to cash when traditional lenders say no.
Risks of Hard Money Loans
High interest rates
Short repayment timeline
Fees and penalties may apply
Risk of losing the property if you default
Dare 2 Dream helps you weigh the benefits and risks before proceeding.
Common Uses in Canada
Fix-and-flip projects
Bridge financing
Land acquisition
Foreclosure prevention
Short-term capital needs
Hard money loans are tools for solving short-term financial problems using real estate assets.
How to Qualify for a Hard Money Loan
Approval depends on:
Property value
Equity in the property
Exit strategy (sale, refinance, income)
Property condition and marketability
You don’t need good credit or proof of income. Lenders focus on the asset and the plan to repay.
Loan Process Step by Step
Initial consultation – Share your goal and property details
Property evaluation – Appraisal or site review
Loan proposal – Terms, rates, and fees
Legal review – Lawyers finalize documents
Funding – Receive funds in a lump sum
Dare 2 Dream guides you through every step.
Costs Involved
Interest: 8% to 18%
Lender fees: 1% to 5%
Legal fees: Varies by province
Appraisal: $300 to $600
Title insurance: Required for most deals
These loans cost more than bank loans, but they move faster and require fewer conditions.
Exit Strategies
You need a clear exit plan before applying. Common strategies include:
Selling the property
Refinancing with a traditional lender
Using rental income
Business cash flow
Dare 2 Dream helps you create and present a strong plan to lenders.
Hard Money Loan vs. Traditional Loan
| Feature | Hard Money Loan | Traditional Loan |
|---|---|---|
| Based on credit | No | Yes |
| Based on income | No | Yes |
| Speed of approval | Fast (1–7 days) | Slow (2–6 weeks) |
| Loan term | Short (6–36 months) | Long (5–25 years) |
| Interest rate | High | Low |
| Property type | Flexible | Limited |
Hard money loans offer speed and flexibility at a higher cost.
Who Should Avoid Hard Money Loans?
You should avoid hard money loans if:
You can qualify for a traditional loan
You don’t have a clear repayment plan
You can’t afford high interest and fees
You are unsure about your investment returns
If you are not sure, talk to a mortgage expert first.
How Dare 2 Dream Mortgage Company Can Help
Dare 2 Dream Mortgage Company helps Canadians access hard money loans with confidence and ease.
1. Personal Consultation
They speak with you to understand your goal. They give clear answers about what a hard money loan involves.
2. Access to Private Lenders
They work with reliable lenders across Canada. This gives you more choices and better terms.
3. Property Assessment
They help you assess your property’s market value to estimate how much you can borrow.
4. Application Support
They help you prepare and submit your documents. This makes the process faster and less stressful.
5. Clear Communication
They explain fees, terms, and timelines in simple language. There are no surprises.
6. Exit Strategy Planning
They help you build a strong repayment plan. This gives lenders more confidence and increases your chance of approval.
7. Fast Turnaround
They move quickly to help you close on time. This is helpful when you face urgent deadlines.
Why Choose Dare 2 Dream?
Experienced in hard money and private lending
Works with both first-time and experienced borrowers
Fast service with personal attention
Focus on results and clear communication
No pressure or upselling
Dare 2 Dream makes the process easy and reliable for people who need quick real estate funding.
Final Thoughts
Hard money loans in Canada offer fast, flexible financing for people who cannot or do not want to use banks. These loans are based on property value and offer quick access to cash. They are useful for investors, buyers with poor credit, and people facing urgent deadlines.
Hard money loans carry higher costs and shorter terms, so it is important to have a clear repayment plan. Dare 2 Dream Mortgage Company helps you understand your options, compare lenders, prepare documents, and close quickly.
If you need fast financing secured by real estate, contact Dare 2 Dream Mortgage Company for a free consultation.