What Documents Do Brokers Need to Submit for a Hard Money Loan Approval?

Hard money loans are a quick, versatile source of financing for property investors and developers who require quick access to money and might not qualify for traditional financing. These loans close as quickly as 7–10 days, much faster than a conventional bank financing's process, so speed can become a competitive edge in heated markets.

The average hard money interest rates sit at 10–12%, as opposed to 6–7% with traditional lenders. Loan sizes range from $300K–$500K on residential flips, averaging $411K across private loans in late 2024. These conditions demonstrate why hard money loans are still a default option for borrowers who require quick, short-term funds.

Paperwork might not be the most exciting aspect of your role as a broker, but in the case of hard money loans, presenting the proper documentation is everything. It can be the difference between closing a transaction quickly or losing it. To get through the approval process quickly, brokers need to show documents that represent the borrower's creditworthiness, feasibility of the project, and the value of the property. If you’re a broker navigating the paperwork for a client’s hard money loan, this guide outlines the loan documents required to secure approval.

1. Why Brokers Are Essential to Hard Money Submissions

As a third-party originator or wholesale partner, you’re the middleman between your investor clients and private lenders. Unlike banks—and even some direct hard money lenders—RCN Capital relies on brokers to:

• Pre-qualify borrowers by verifying equity and financing needs
• Collect accurate paperwork so underwriters can green-light loans swiftly
• Help structure deals that meet both investor and lender requirements

Your perseverance translates into quicker closings—typically in 7–10 days—whereas conventional mortgages stumble along at a 4–6 week pace.

2. Core Documents Every Broker Must Gather

Below is the essential "paperwork for hard money loan approval"—by category and annotated with suggestions for your submission.

Purchase & Sale Agreement

If the transaction involves a purchase, there must be a signed contract between seller and buyer. This demonstrates to the lender that the borrower is under contract.

Why it matters: Confirms the transaction terms, purchase price, and escrow deposit.

Tip: Ensure any contingencies (inspection, financing) align with your lender’s approval window.

Proof of Income & Bank Statements

Why it matters: Demonstrates borrower cash reserves to cover holding costs.

• Common docs: Last 2–3 months of bank statements, tax returns or W-2s (if available), proof of liquid reserves.
• Stats: Lenders often withhold 4–12 months of interest in escrow if reserves are thin.

Appraisal & Title Report

Why it matters: Verifies property value and uncovers liens or encumbrances.

• Process: Lender-ordered appraisal; borrower pays.
• Tip: Coordinate with the title company early to expedite the preliminary title report.

Deed of Trust & Promissory Note

Why it matters: Legally secures the loan against the property and outlines repayment terms.

• Deed of Trust: Filed with the county recorder for public notice.
• Promissory Note: Specifies interest rate, repayment schedule, and maturity date.

Identification & Entity Paperwork

Why it matters: Confirms borrower identity and legal structure.

• Individuals: Driver’s license + passport.
• Entities: Articles of Incorporation, Operating Agreement, EIN confirmation.

Hard Money Loan Application

Why it matters: Lays out the loan terms, LTV, and borrower details.

This document provides the foundational information a lender needs, including:

• Type of loan (purchase, refinance, fix-and-flip, etc.)
• Loan amount requested
• Intended use of funds
• Property details (address, type, current condition)
• Exit strategy (sale or refinance)
• Borrower credit score and financial profile

Tip: Fill in as many fields as possible to avoid back-and-forth.

3. Supplemental Underwriting Documents

Depending on deal complexity, lenders may request additional materials:

Cost Estimates & Contractor Bids

Purpose: For bridge or fix-and-flip loans covering rehab draws.

• Tip: Obtain 2–3 bids and a line-item breakdown. Competitive rates and accuracy help underwriters trust your budget.

Exit Strategy / Business Plan

Purpose: Demonstrates repayment path—sale or refinance.

• Tip: Include ARV comps, sales timeline, and refinance scenario details.

Personal Financial Statements & Liabilities

Purpose: Shows overall borrower stability and debt obligations.

• Tip: Use a simple liabilities list: outstanding mortgages, credit lines, and other liens.

4. 2025 Market Snapshot: Why Speed & Accuracy Matter

Interest Rate Trends

• Conventional mortgages: 6–7% in May 2025, per Freddie Mac’s recent data.
• Hard money loans: 10–12% on average, driven by higher lender risk and shorter terms.

Average Loan Amounts

• Private loans: $392K–$446K range in late 2024; $411K average per AAPL data.

Turnaround Time Advantages

• Hard money: 7–10 days from funding application.
• Banks: 30–45 days, with multiple underwriting layers.

With these figures, your neatly packaged submission can seal deals in a quarter of the time, equating to more money and happier clients.

5. Pro Tips for Brokers

1. Use standardized templates: Create your own "hard money loan application checklist" so nothing gets overlooked.
2. Digital file sharing: Share docs on secure portals proactively—no more lost email attachments.
3. Client prep calls: Educate borrowers on the purpose of each doc to minimize missing items.
4. Lender-approved vendors: Employ appraisers, title companies, and contractors on your lender's preferred list for faster turnaround.
5. Regular status updates: Keep investors informed; cut down anxious calls by sharing a timeline upfront.

6. Conclusion & Next Steps

In today's competitive real estate market, speed and accuracy are your best selling points. Equipped with this Hard Money Loan Application Checklist and market intelligence, you can:

• Close more deals in under two weeks
• Offer hard money loan requirements with clarity
• Build stronger relationships with private lenders like RCN Capital

Ready to get down to business? RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate professionals. If you are looking to offer hard money programs to your clients, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.