You’re not alone when it comes to exploring options for business expansion. However, this can be a costly expense that you may not be able to afford. This is when it’s imperative to look at obtaining Florida new construction loans.
There are various things to explore when searching for a commercial loan. At Delancey Street, we’re here to show you what options are available.
Understanding Florida New Construction Loans
Before you get too heavily involved with how to get approved for a loan, you need to understand what Florida new construction loans actually are. These loans are available to finance costs associated with renovation or construction. The funds can be used for a variety of construction purposes. You can choose when to get the money based on what you’re buying, such as materials, labor, or inspections. From there, you can establish a payment plan that works well for your budget.
Why a Loan is Necessary
A new construction loan may be the best way for you to get the money needed to renovate your existing space or even construct a brand-new building. Since renovations and construction projects can be expensive, you have to consider how much cash you will need. Depending on the details of your project, it could be thousands of dollars. This may not be money that you have available.
Lenders can provide you with the funds that you need in order to get the construction process started.
How Loans Work
How new construction loans work in Florida will depend on the lender. These vary considerably from commercial mortgages. In most instances, commercial mortgages are paid back over 10 years and you receive the full amount as a lump sum. However, commercial construction loans involve getting money as the various stages of construction evolve. You will pay interest based on the amounts you have actually received. You can choose to pay off the principal in a full sum at the completion of the construction project or use the property as collateral while you make payments.
As you explore Florida commercial construction loans, you will want to look at several important components:
- Interest rates
- Down payment
Interest rates will need to be explored as it will impact how much you spend on the construction project in its entirety. Various fees may also be associated with the loan, including guarantee, documentation, and project review fees. Commercial construction loans are also identified as high-risk, requiring a down payment.
Commercial lenders will evaluate your eligibility based on your credit score. Most lenders will want to see a score in the high 600s. Your debt to income ratio will also be investigated. Your industry experience and your current business financials will also be requested in order to learn about your ability to pay back the loan amount.
When you work with the right company, applying for a commercial loan is easier than you might think.
At Delancey Street, we are here to empower entrepreneurs. We can help you to find the new construction loan in Florida that suits the project you are working on. Complete an application today in order to learn more about the loan opportunities that exist.
If you’re a real estate investor, you probably know how profitable is for fixing and flipping homes. There’s even more great news. Our company now offers hard money loans to help finance your projects. That means you’ll be able to take advantage of more deals and increase your bottom line. Even if you’ve been turned down by banks, finance companies, or private investors, you’ll want to check us out. We provide loans in a matter of days rather than weeks.
What is a Hard Money Loan and How Will it Benefit Me?
A hard money loan is an alternative to self-funding or borrowing from banks and private lenders. The loan can be used to purchase and rehabilitate properties for resale. Bridge loans provide access to fast funding to purchase properties without using any of your assets. You’ll never have to pass up a great opportunity due to lack of financing.
Hard money loans are a type of real estate financing that has a short term. One year is common and they can be extended up to five years if necessary. They typically have higher interest rates than a traditional loan; however, the convenience factor far outweighs the cost for most investors. Interest-only, balloon payments, and adjustable rates are common. This provides a benefit to the investor by having a low monthly payment while the property is being rehabilitated and sold.
Hard money loans have fast approval and funding times. It’s common for a loan to be originated and funded within the same week. This allows investors to act quickly when a great property is listed. We’ve worked with many estate investors and understand that timing is everything with investments.
How Does a Hard Money Loan Differ from Traditional Mortgage Financing?
Traditional bank financing is appropriate for owner-occupied and held properties. It’s not appropriate for houses that are to be resold for a profit. These government backed loans must adhere to strict underwriting and approval criteria. The processing times are lengthy, and the loan can be denied at any point if the documentation provided doesn’t support the borrower’s claims. While the interest rates tend to be lower, insurance is required for properties when the loan to value ratio is too high. This often adds a sizable amount to the monthly payment.
Traditional loans providers also tend to focus on the borrower’s overall financial health. This means that minimum credit scores, enough assets, and stable income must be documented sufficiently. While these government backed loans are great for homeowners, the reality is that they simply don’t work for real estate investors.
What Documentation is Needed to be Approved for a Hard Money Loan in Florida?
At minimum, a property that’s able to be rehabilitated within a reasonable amount of time must be selected. Any documentation that supports the home’s current value and recent home sales within the area is also helpful. An appraisal is ordered as supporting documentation. A home inspection is useful to determine the true condition of the property. Personal and business financial documents should also be available for review, if requested.
How Do I Apply for a Hard Money Loan in Florida?
Applying for your loan is fast and easy. Simply complete the online inquiry form and we’ll have one of our courteous and professional loan representatives get in touch with you. They’ll guide you through the process and help you determine the best course of action for your loan request. Keeping on top of things during the processing phase also helps. You’ll soon see why so many real estate investors have come to depend on us for their real estate financing needs. Get in touch with us and we’ll be happy to provide you with the same great service, today!