A hard money loan is a loan backed by a “hard” asset, a tangible property that produces a profit to pay the loan faster. Typically used in “Fix and Flip” projects. With a hard money loan, you finance acquisition and renovation costs, which reduces out of pocket expenses.
Hard money loans close quickly and have less qualification requirements than conventional loans. These factors allow investors to compete for deals, retain needed capital, and maximize return.
Common Loan Fees*:
- 12% – 14% interest only payments
- 3 to 5 points origination (depends on location)
- Appraisal Fee: $425 – $550 (dependent upon location and independent appraiser’s fee)
- Inspection Fee: $100 – $400/ inspection
- Loan Documents: $475
- Loan Admin Fee: $500
- Credit Report Fee: $40 ($45 for Joint)
- Flood Certificate Fee: $15
- Monthly Servicing Fee: $15
Common Loan Terms*:
- A mortgagee’s title policy is required.
- An insurance policy is required on all loans for the term of the loan.
- Up to 70% of the After Repaired Value (excluding points & fees), not to exceed 100% of cost.
- 6 month term
- 3 month optional extension (extension fees may apply)