The interest rates on hard money loans are typically higher than the rates charged for traditional business loans. The interest rates could range from 10% to 18%. Despite this, such loan options are popular among real estate investors for their fast approvals, higher flexibility, less tedious documentation procedures and, at times, the only option for securing funds.
A hard money loan might be an appropriate option if you do not have a high enough credit score to secure a loan from a bank. They are generally used as "bridge" loans between construction financing and long term loans; hard money loans are often used for construction because longterm lenders may want finished and leased projects.
Hard money loans, also known as private loans, rehab loans, bridge loans and construction loans, are a form of real estate investment financing available to purchase and repair a property. Hard money loans do not follow conventional standards that are required by banks or mortgage brokers, which allows you to obtain maximum leverage for a distressed property as well as to obtain funding for repairs.
Hard Money Loans With No Money Down Eliminating a lower amount of student loan debt for those with household incomes between $100,000 and $250,000. A person with household income of $130,000 would see $40,000 in college debt eliminated,
Hard money loans, on the other hand, are based on a "hard" asset or the value of the property, so hard money lenders don’t usually ask for documentation of income or any of that messy stuff when we are funding a fix and flip investment.
What Is A Hard Money Loan Lenders Hard money loans are short-term loans for real estate investors. Using equity in other properties,or the investment property itself to secure the loan, hard money loans are typically used for a 5-12 month period to fund property acquisition, renovation costs, or both.
· Hard money lenders often limit the amount they are able to lend at 75% of the value of the property being borrowed against. For example, if a lender valued a property at $400,000 they would be able to lend up to $300,000 on the property if they stuck to the 75% loan to value (LTV) ratio.
Interest rates for hard money loans range from 10 – 15% depending on the specific lender and the perceived risk of the loan. Points can range anywhere from 2 – 4% of the total amount loaned. The interest rates and points may vary greatly depending on the loan to value ratio.
Hard money lenders typically charge higher interest rates due to the greater risk associated with these loans, and the incredible speed in which they are able to process and fund transactions. Hard money loans are a very strong tool for investors who need to move quickly.