What’s the process
These loans provide investors with fast capital. This is great for short term needs, where you need to move quickly in order to rapidly capitalize on a new deal. hard money loans are a form of collateralized loans where there is hard property.
What’s the interest rate on these loans
Hard money lenders each charge their own interest rate. Rates range from 10% to 18%. Some lenders will defer interest payments to the payoff. It all depends on the terms of the deal. Since this is regulated, you have the opportunity to create a set of terms and conditions that suit your unique situation.
What loan to value should I look for when approaching a lender
Typically, a loan should not exceed 70-80% of the after repaired value.
How long are the loans for?
Typically, lenders will write notes for 3-12 months depending on the lender and your exact needs. The longer the term, the higher your costs and the interest rate.
Does my credit matter?
Not really. Some lenders might do a credit check to look for things like bankruptcies, foreclosures, charge offs, and collection. Their goal is to look at your ability to repay, and how much of a risk you are. They mostly care about your collateral, which means they care about the property.
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