What credit score do I need for a hard money loan?

Most private money and hard money companies, including Hanover Mortgage Company, don't require a minimum credit score. Approval is evaluated primarily on the property value, available equity, the borrower's exit strategy, and real estate experience, rather than credit score alone.

Borrowers with less-than-perfect credit can still qualify when the underlying deal supports it — though every file is subject to underwriting review and verification.

How fast can hard money financing close?

Closing timelines are not guaranteed and vary by transaction. Pace depends heavily on how quickly the borrower provides documentation and how the property and deal are structured. Hard money financing can generally move faster than a conventional bank loan, but no specific timeframe is promised for any deal.

Hanover Mortgage Company:

• Underwrites in-house
• Structures the deal directly with the borrower
• Presents the file to private trust deed investors for funding

This structure can allow for a faster process than a traditional bank loan, though the actual timeline depends largely on the borrower's responsiveness and remains subject to underwriting approval.

How are hard money loans different from bank loans?

Hard money loans are generally evaluated on:

• Property value and available equity (rather than income documentation)
• Down payment or equity position
• The borrower's real estate experience
• Exit strategy (sale or refinance)

Traditional bank loans typically require:

• Tax returns
• W-2s and income verification
• Longer approval timelines

Because of this, business-purpose hard money financing may be a better fit than a conventional bank loan for real estate investors, for a variety of reasons.

What are typical terms?

General industry ranges — not a quote and not specific to any one hard money company:

• Term: Typically 1–5 years, structured as a balloon loan (not fully amortized). Hanover Mortgage Company can also arrange interest-only and fully amortized loans on longer terms — see below.
• Loan-to-value (LTV): Maximum LTV varies by property type — generally up to 70% for 1–4 unit residential properties, up to 65% for commercial properties, and land is evaluated case by case
• Combined loan-to-value (CLTV): Typically capped at 60% when subordinate financing (a second position or other liens) is involved

Hard money financing typically carries a higher cost than a conventional loan, reflecting its role as short-term, asset-based financing rather than a long-term consumer mortgage. Actual terms depend on the specific transaction and are subject to change without notice — ask for current rate information before relying on any figure here.

How much of a down payment is typically required?

Down payment or equity requirements generally range from 10%–35%, depending on the private money or hard money company, the deal, and the borrower's experience level. This is a general range, not a quote — Hanover Mortgage Company evaluates equity requirements case by case and does not offer 100% financing. Hanover Mortgage Company requires the borrower to have some equity investment, or "skin in the game," in every transaction — this aligns the borrower's incentives with the outcome of the deal and is a key factor trust deed investors expect to see before funding. Within that, Hanover Mortgage Company tries to be as creative as possible in structuring a deal to help it work for the borrower.

Cash reserves are required.

Generally, more equity in the deal supports stronger terms, and borrower experience goes a long way — an investor with a track record of successful projects and exits is often able to qualify with a lower down payment or reserve requirement.

Is an appraisal required for a hard money loan?

Not always across the industry — some private money and hard money companies rely on internal valuations or market comps rather than a full appraisal to speed up the process. Hanover Mortgage Company requires an appraisal from a licensed appraiser as part of underwriting every business-purpose transaction. Appraisers used are required to carry errors and omissions (E&O) insurance.

Beyond the appraisal, Hanover Mortgage Company uses lite documentation underwriting — the process is streamlined and focused on the property, equity, and exit strategy rather than the extensive income and tax documentation a conventional bank requires. An appraisal is still required; "lite doc" refers to reduced borrower paperwork, not reduced property verification.

What happens if I can't pay off the loan by the maturity date?

Depending on the situation, options may include:

• A loan extension (fees may apply)
• Refinancing into new financing
• Selling the property

Availability of any of these options depends on the specific loan, the property, and market conditions at the time — none is guaranteed.

How much can I borrow?

Maximum loan-to-value (LTV) depends on property type, to protect both the borrower's equity position and the trust deed investor's capital:

• 1–4 unit residential: Up to 70% LTV
• Commercial: Up to 65% LTV
• Land: Evaluated case by case, with no standard LTV quoted

Where the deal involves subordinate financing (a second position or other existing liens), combined loan-to-value (CLTV) — the total of all liens against the property — is typically capped at 60%, regardless of the LTV maximum for that property type.

Actual LTV and CLTV offered on a given deal also depends on the borrower's real estate experience — a more experienced investor with a track record of successful exits may be offered terms closer to the maximum, while a first-time or less experienced borrower may see a lower LTV to offset that added risk.

What do private money and hard money companies look at when evaluating a deal?

Key factors typically include:

• Property value and location
• Equity or down payment
• Exit strategy
• Overall deal viability
• The borrower's real estate experience

A strong deal with clear equity and an achievable exit strategy often matters more than a borrower's credit profile alone.

Is hard money financing available for a primary residence?

Business-purpose hard money loans are structured for investment, commercial, or business use — not personal, family, or household purposes. An owner-occupied property can potentially qualify if the loan itself is for a business purpose, such as a business-purpose cash-out refinance used to fund business capital, rather than personal use of the proceeds. Hanover Mortgage Company does not impose a seasoning requirement on cash-out refinances — meaning there's no minimum ownership period required before a property can be refinanced for cash out. Every scenario is evaluated case by case.

What loan structures can Hanover Mortgage Company arrange?

Beyond short-term hard money and private money bridge financing, Hanover Mortgage Company can also arrange interest-only loans as well as fully amortizing loans on 40, 30, 25, 20, and 10-year amortization schedules, depending on the deal and the borrower's goals. Availability, term, and structure are evaluated case by case and are not guaranteed for every transaction.

Hanover Mortgage Company is also open to longer-term loans beyond its typical offerings and has accommodated these structures for borrowers in the past, evaluated case by case.

Can Hanover Mortgage Company help structure difficult or unique deals?

Yes. Hanover Mortgage Company is known for creative, deal-specific structuring on non-standard collateral, multi-parcel transactions, and unconventional property types, evaluated case by case.

Hanover Mortgage Company:

• Sources capital from private trust deed investors
• Underwrites and structures loans in-house
• Prepares custom California loan documentation
• Presents each file to trust deed investors for funding

The goal on every file is a well-structured, "make-sense" loan that can actually close — a win-win outcome for both the borrower and the trust deed investor backing it, not just terms that favor one side.

Does Hanover Mortgage Company fund loans directly?

No. Hanover Mortgage Company is a private money mortgage company that arranges financing — it does not fund loans directly. Capital is provided by private trust deed investors, with financing arranged under Hanover Mortgage Company's California DRE broker license. Loan inquiries submitted online are reviewed and evaluated the same as any other file.

See examples of closed transactions on the Transactions page. Past transactions do not constitute a commitment to lend or a guarantee of terms, approval, or outcome for any other property or borrower.

Why work with Hanover Mortgage Company?

• Direct, in-house underwriting and communication
• Creative, deal-specific structuring
• Local expertise in Orange County and statewide California real estate
• Established relationships with private trust deed investors

Current review counts and ratings can change over time — see Hanover Mortgage Company's Google Business Profile for up-to-date reviews.

Still Have Questions? Let's Talk.

Call: (714) 838-1474 ext. 102 (Sales)
Visit: Hanover Mortgage Company, Tustin, CA