Not all hard money lenders are created equal. The right lender can make your real estate investment smooth, fast, and profitable, while the wrong one can lead to delays, unexpected fees, and lost deals. With so many options available, how do you separate the reliable lenders from the ones that could put your deal at risk?

Whether you’re an investor looking for your next fix-and-flip project or a mortgage broker guiding clients, here are the key questions to ask before choosing a hard money lender.

1. How Fast Can You Fund a Loan?

Speed is everything in real estate. If a lender drags their feet, you might lose a deal to another buyer with faster financing.

✅ Look for: Lenders that can fund within 7 days or less for most deals. Some direct lenders even offer 24-hour approvals and same-week closings.

🚨 Red flag: Lenders that take weeks to process applications, requiring excessive documentation similar to traditional banks.

2. What Are Your Interest Rates and Fees?

Hard money loans have higher interest rates than traditional loans, but transparent pricing is key to making a smart financial decision.

✅ Ask for: A clear breakdown of interest rates, origination fees, underwriting fees, and prepayment penalties before signing.

🚨 Red flag: Lenders who dodge pricing questions or add unexpected fees at closing.

3. What Loan-to-Value (LTV) Ratio Do You Offer?

Loan-to-Value (LTV) determines how much financing you can get compared to the property’s value.

✅ Industry standard: Most lenders offer 65% – 75% LTV based on the after-repair value (ARV) for fix-and-flips and current market value for rental properties.

🚨 Red flag: Lenders offering unusually high LTVs (90%+) may have hidden risks or excessive fees.

4. Do You Require Experience from Borrowers?

Some lenders only work with experienced investors, while others welcome first-time borrowers.

✅ Best option: A lender that offers flexible options based on borrower experience and deal strength.

🚨 Red flag: Lenders who reject borrowers simply for being new to real estate, even if they have strong deals.

5. Do You Lend on the Type of Property I’m Buying?

Not all hard money lenders finance every type of real estate.

✅ Ask about:

  • Single-family homes (fix-and-flips, rentals)
  • Multi-family properties
  • Commercial real estate
  • Land development

🚨 Red flag: Lenders that only finance certain property types without flexibility.

6. Are You a Direct Lender or a Broker?

Some companies fund their own loans, while others act as brokers, connecting you with third-party lenders.

✅ Best choice: Direct lenders who control their own funds, leading to faster approvals and predictable loan terms.

🚨 Red flag: Brokers who promise financing but don’t have final say on approvals.

7. What Are Your Prepayment Penalties?

Some lenders charge fees if you pay off the loan early, cutting into your profits.

✅ Ideal lenders: Offer loans with low or no prepayment penalties so you can repay early without extra costs.

🚨 Red flag: Hidden prepayment fees that make exiting a loan costly.

8. Do You Offer Loan Extensions?

Sometimes projects take longer than expected. Will your lender work with you or push you into default?

✅ Look for: Lenders with flexible extension options if you need more time to complete a project.

🚨 Red flag: Rigid lenders that immediately demand full payment if a project takes longer than expected.

9. What is Your Track Record and Reputation?

A lender’s history speaks volumes about their reliability.

✅ Check:

  • Online reviews and testimonials
  • Referrals from other investors or brokers
  • Years in business and completed deals

🚨 Red flag: Lenders with poor reviews, complaints about delays, or a lack of references.

10. Can You Provide Proof of Recent Deals?

A reputable lender should have no issue sharing details of recent transactions.

✅ Request: A portfolio of recently funded deals to ensure they have real experience.

🚨 Red flag: Lenders who refuse to provide examples of past deals.

Choose Wisely and Close Deals Confidently

Finding the right hard money lender isn’t just about getting the best rate—it’s about working with someone who can fund quickly, communicate clearly, and help you close profitable deals.

Take your time to vet lenders, ask the right questions, and ensure they align with your investment goals. A good lender will be a long-term partner in your success, not just a one-time transaction.

Need a reliable hard money lender who checks all the right boxes? Contact Lending Bee today and let’s get your next deal funded—fast.