3 Things You Should Know About Hard Money Loans

A hard money loan (also called Private Money Loan) is a short-term, interest-only loan that is secured by the value of the property, and it allows the purchase and repair of an investment property.

1- Hard Money Loans have shorter terms and higher rates than traditional bank loans. 

Real estate investors prefer hard money financing over traditional bank financing for a multitude of reasons. Banks can lend at much lower rates, but their criteria are much more stringent. Our loans typically range from $100K - $1.5M with 3 to 18-Month terms. When determining your interest rate, we take several factors into account including property location, credit score, borrower experience and loan to value. We’re happy to provide all borrowers with their interest rate sheet so they know exactly why they are paying their respective rate. Currently, rates range from 8.99% to 13.99% for standard hard money loans, and 11.99% to 13.99% for construction loans.

2- Faster turnover 

Real estate investors typically make a higher return on investment with hard money loans due to the fact they can finance the repairs to the property as opposed to using their cash. Banks evaluate the borrower, as their primary qualification. Hard money lenders evaluate the investment property as our primary qualification, which allows us to move more quickly and requires much less documentation. Beyond that, we use the after-repaired value to evaluate your loan, something few banks will consider.

3- Loan typically is capped at 70% ARV

The amount of financing is determined by the characteristics of the property and the qualifications of the borrower. We lend up to 85% of purchase and up to 90% of rehab costs up to a maximum of 70% after rehab value (ARV).

Choose a lender that is experienced with the type of loan that you’re are seeking. As a borrower, you should have a full understanding of the loan terms, and process. We have over two decades of real estate experience that allow us to provide you with the success you deserve. 


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