Hard Money Home LLC

Common Questions and Answer



What are the Advantages of Hard Money Loans?

Hard Money Loans provide Investors access to cash to purchase investment properties.   The process is simple and we can fund quickly, typically within 72 hours of receiving the final docs from the Title Company.  Hard Money Loans allow you to work on multiple projects and increase your buying power .



What is the interest rate?

The rate will range from 15% to 20% interest only that is payable monthly.



What Loan-to-Value are we looking for?

Typically a loan does not exceed 65% of the after-repaired-value (ARV). This figure is calculated based on what other "Move-In-Ready" houses in the neighborhood have sold for in the past year.



How long is the loan for?

Typically our loans are from 3 months to 12 months depending on your needs. Longer terms can lead to increased costs or interest rates.



What are the costs?
All loans will require Title Policy, Insurance, and Appraisal. These services come with fees that cost approx $1900.  All loans also require origination points ranging from 5 to 10 points.



Does my credit matter?
Maybe. We don"t run your credit, but want to know about past bankruptcies, foreclosures, charge offs, and collections. We are concerned with your ability to repay. The loan is more collateral based, which means we really look closely at the property and its (ARV).



Do I need to put any money down?
In most cases, Yes.  We want to ensure that you have enough resources to finish the repairs and cover the costs of the loan plus any surprises.  Expect to pay all origination/discount points and other costs at or before closing.  If you cannot afford to close you typically cannot afford to take out this type of loan.



How does Hard Money compare to a traditional non-owner occupied investor loan?
This would be like comparing apples to oranges.  Hard Money has a very specific purpose.  Typically these loans are for a quick turn around.   Conventional financing is used for your traditional rentals and long term hold scenarios.   The purpose of a Hard Money Loan is to purchase and hold the property for a short period of time then sell it to an owner occupant or refinance into conventional finance.