What documents are involved in a hard money loan?

Document requirements for hard money loans will vary depending upon the type of loan. If the loan is intended for an owner occupied property, personal income documentation will be required, and must exhibit the borrower’s ability to repay. This will mean tax returns and other income proof, along with asset proof. If the loan is non-owner, the requisite paperwork is much less intrusive. Many times, a rental agreements or estoppels may be sufficient for income. Other items include a loan application, credit report, a letter explaining use of funds and a letter explaining the borrower’s “exit strategy” (how the borrower plans to pay off the lender completely). Other loan documents that accompany a hard money loan include a Note and a Deed of Trust, Escrow and Title documents.