hard money loans

Hard Money Loan Rates

By on January 13, 2020   /   hard money loans, Investment Property Loans  
Are Down Payments Needed

The average interest rate for a hard money loan is 11.25% with rates varying from 7.5% to 15% for the US in 2020. Hard money lenders also charge “points” and each point is the equivalent of one percent of the loan. These points help to cover the expenses of the loan and mitigate the risks the lender is undertaking. Points are normally paid upfront as opposed to interest that is paid back monthly.

Interest Rates And Points

Depending on the area of the country wherre you reside and from lender to lender, points charged and interest rates will differ. In many cases competition plays a large part in the rates offered. In a heavily populated area of the country where there are many hard money lenders – competition will drive interest rates and points charged to a lower total cost than in more rural areas where there is not so much competition. Obviously there is greater risk taken by hard money lenders when they lend money compared to hwne a bank does so – hence the interest rate will be higher than conventional bank loans. As well as interest rates in the ten to fifteen percent range, you can expect the points to be somewhere around three percent with variances from around two to ten percent, depending on the ratio of the loan to value.

Value Ratios

The Loan to Value (LTV) is decided by the ratio of the amount of the loan divided by the value of the property. Often hard money loan lenders will lend up to around seventy percent of the properties current value. Some hard money loan lenders will lend money based on the ARV or After Repair Value – that is to say the value after improvements to the property have been completed. However, this is a riskier loan proposition from the perspective of the hard money lender, because they are putting more money upfront and therefore will come at a higher interest rate. Some hard money lenders will even finance the rehab costs and lend a higher percentage of the ARV but as these loans are far more risky, you can expect far higher rates of interest in the region of fifteen to eighteen percent and five to six points when the lender is fundinga loan with little or no down payment from the person who is borrowingthe money. However, if the borrower can still make a profit at these interest rates, they may decide it is their best option.

Phoenix Hard Money Real Estate Loans

If you’re interested in getting involved with real estate investing and need the capital to purchase properties hard money is a great way to get started.  Brad Loans has extensive experience in both real estate investing and hard money lending and is proud to offer Phoenix Valley real estate investors the financing they need.  It is easy to get started applying for hard money loan and Brad Loans is able to work with clients with bad credit and no credit. We are your source for hard money when traditional banks say no.  Read more about Brad Loan’s hard money loan programs or get started fill out our hard money loan application or give us a call to ask questions at 480-948-0880.

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Refinancing With Hard Money Lenders

By on October 9, 2019   /   hard money loans, Investment Property Loans  

Refinancing With Hard Money Lenders

Hard money loans can be a solution for homeowners in foreclosure. It allows them to pay off the foreclosing lender with a hard money refinance giving the homeowners additional breathing room to fix their credit or sell their property and obtain long-term financing.

Refinancing Steps

Obtain a list of hard money lenders in your area. Typically, they restrict their lending activity by geographical area because they make lending decisions based on their familiarity with the local housing market. The Internet is one of the best ways to find local lenders, but you can also ask for a referral from a traditional lender. In some markets, you might be able to find a mortgage broker who has knowledge with private money options.

Investigate each hard money lender. Each lender will have its own loan application process, loan terms and fees. The interest rate and points offered for this type of loan will be much higher than a traditional loan, so it is in your best interest to find the lender that will give you the best terms. Hard money is a legitimate lending source, but there are unscrupulous lenders. Check the reputation of each lender with your local department of consumer affairs and Better Business Bureau before initiating any transaction.

Prepare your loan documentation. Hard money lenders rely primarily on the loan-to-value ratio of the house you are refinancing to make a financing decision. Consequently, you are more likely to obtain a loan if you have enough equity in your house. Gather proof of the value of your home, including appraisals, and the loan documentation for any outstanding loans. Typically, a lender will want to see some documentation to verify how you will make your loan payments. Some lenders might want to see additional documentation such as tax returns and credit reports.

Apply for a hard money loan. Download an application from the lender’s website or call the office directly to initiate the application process. Most hard money lenders design the application process to be short and quick, allowing you to have access to the loan money in as few as seven days.

File your loan documents with the lender. When the hard money loan is approved, use the proceeds to pay off the primary loan on your house. The new loan becomes your primary mortgage. Record the transaction with the local recorder of deeds.

Work to obtain long-term financing to replace the hard money loan or sell your home. Hard money is merely a short-term bridge loan. The interest rate will be too high for you to carry the loan for more than one or two years. During this time, you should work to fix whatever deficiencies exist in your financial profile that prevented you from obtaining traditional refinancing. Alternatively, sell the house, pay off the hard money loan and pocket your equity.

Moving Forward

The terms of a hard money loan typically include summary foreclosure or repossession rights. If you default on the hard money loan, you will likely not have the same options as with a traditional mortgage, so it is very important to have a realistic exit strategy to replace the hard money loan before you take one out.

When choosing a hard money lender, make sure you understand how the lender handles defaults or an inability to refinance the loan in a reasonable amount of time. Some lenders are more reasonable than others, and it is in your best interest to pick a lender that will work with you if problems arise.

Phoenix Hard Money Real Estate Loans

If you’re interested in getting involved with real estate investing and need the capital to purchase properties hard money is a great way to get started.  Brad Loans has extensive experience in both real estate investing and hard money lending and is proud to offer Phoenix Valley real estate investors the financing they need.  It is easy to get started applying for hard money loan and Brad Loans is able to work with clients with bad credit and no credit. We are your source for hard money when traditional banks say no.  Read more about Brad Loan’s hard money loan programs or get started fill out our hard money loan application or give us a call to ask questions at 480-948-0880.

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Hard Money Loans For New Construction

By on July 30, 2019   /   hard money loans, Investment Property Loans  
House Flipping FAQ

Hard Money Loans For New Construction

As the real estate market grows and then fluctuates, the one constant is investors in real estate still need money so they can fund their projects. But the everchanging nature of lending has made it tougher for developers to secure the money required through traditional means.

And it is here where private lending hard money loans can be of great help. They are an important option for developers wanting to get their project underway but may not be suited to a traditional leader loan.

Hard Money vs. Traditional Lender Construction Loans

While conventional loans are issued traditionally by banks, hard money loans are provided by investors or investment groups. Hard money construction loans are secured by the real estate being purchased. They often charge higher interest rates than loans from a bank, but can close in just a few days. When considering hard money vs. traditional construction loans, you should consider the following questions:

When Do You Need The Money?

Time is often vital when it comes to teh success of the project. Funding a loan quickly can often be the difference when you need to secure a great deal. Though timelines vary when it comes to obtaining a construction loan, hard money loans tend to be quicker. While most hard money construction loans can be funded within a week, traditional lenders often take a great deal longer.

How Should Your Loan Be Structured?

Traditional lenders take a one-size-fits-all approach to construction loans. Their terms are straightforward, but there is little room for negotiation when it comes to your specific loan requests. On the other hand, hard money lenders often provide more flexible terms. This means hard money lenders can structure the loan terms in ways that benefiting everyone. In addition, they can also provide repayment schedules that are structured to meet the borrower’s individual requirements.

What Type of Loan Is Available To You?

Approval is one the most important when it comes to construction loans. Even with a good financial history, the bank may still see something in your application that indicates you aren’t a good fit for a conventional loan, such as incomplete records or self-employed work. Hard money lenders are able to take more than just the borrower or company’s financial history into account.. A hard money lender looks at your ability to repay the loan as well as how much equity you have invested in the property.

Which Loan Type Is Best For You?

If you hwere turned down for a conventional loan, then a hard money loan may be just the solution to helping you get your project funded. Similarly, if the less flexible loan structures offered by traditional lenders don’t work for you, then you may want to explore your hard money loan options. In this business, being able to quickly take advantage of deals and secure land or properties is important. While conventional loans are slower when it comes to approval and funding, hard money loans can be completed and funded quickly, allowing builders to jump on excellent opportunities.  Finally, consider which loan will give you the flexibility and terms you need to get your project off the ground.

Phoenix Hard Money Real Estate Loans

If you’re interested in getting involved with real estate investing and need the capital to purchase properties hard money is a great way to get started.  Brad Loans has extensive experience in both real estate investing and hard money lending and is proud to offer Phoenix Valley real estate investors the financing they need.  It is easy to get started applying for hard money loan and Brad Loans is able to work with clients with bad credit and no credit. We are your source for hard money when traditional banks say no.  Read more about Brad Loan’s hard money loan programs or get started fill out our hard money loan application or give us a call to ask questions at 480-948-0880.

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