Hard Money Lender Florida Ocala 34474

David Di Natale

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Hard Money Lender FL Ocala

What’s hard money loan?

A hard money loan is a loan given to your borrower from a lender based primarily on the worth of the underlying asset that is collateralized. Where asset based lenders aka hard money lenders focus primarily on the value of the asset being used as collateral for the loan traditional banks and lenders focus chiefly on the credit and income of the borrowerWhere conventional loans are usually for 1520 year periods, hard money loans are used as a short term alternative (13 years usually) as a bridge to acquire a rehab, or stabilize a commercial, retail, office, industrial, multifamily, or single family residential home.

Why exactly would someone pick a hard money loan (assetbased loan) over a traditional loan provided by a bank with lower rates?

There are many reasons why a borrower would choose to use private financing or a hard money loan over a cheaper conventional funding: (1) Quick Funding conventional banks take the absolute minimum of 45 days to finance one family residential loan, any where between 6090 days to finance a commercial loan, and over 120 days to fund a development loan. Whereas, a hard money loan is typically financed within 714 days. (2) Property Requires Work because of the conventional bank‘s quite conservative underwriting guidelines, most will not lend on properties needing repair. Nevertheless, a private lender will be pleased to loan on a property that either lacks cash flow or requires physical advancements so long as the borrower has enough skin in the game” (equity). Before it can be used for instance, banks really rarely finance a loan secured by a property in need of repairs; hence the borrower uses a hard money lender then, and to buy and rehabilitate the property settlement the hard money loan with normal funding. Another example would be a commercial property that has no tenants a bank won’t loan until the property is leased up. Nevertheless, an exclusive lender will provide short-term financing to the borrower to buy the property and lease it up to stabilization. Once the property is stabilized for a specific time period, a commercial lender will refinance the hard money loan with traditional financing. (3) Not based entirely on credit or income Traditional banks rely greatly on a borrower’s credit score, previous income, and ability to repay the debt. Consequently even quality borrowers such as for instance doctors, lawyers, and solicitors who have high incomes but also have a lot of debt are turned down by traditional banks for conventional funding. Consequently, there is a huge need for private lenders who look the value of the underlying asset when compared with the amount of the loan versus the borrower’s credit history. We generally look for a 50% 65% LTV in our loans. What that means is we ordinarily lend 65% out of the appraised value of the property to the borrower.

What are the interest rates involved in hard money loans?

Hard money loan rates typically range from 10% all the way up to 15%The rate by the lender is dependent on taking a look at a mix of factors such as: (1) loan to value ratio, (2) borrower’s credit score & income, (3) the property state and place, (4) borrower’s skin in the game” (sum of cash equity in the property). At Capital Funding Financial we offer the lowest rates around starting at 8.9%*

What are the fees involved in asset based lending?

Most hard money lenders charge a loan origination fee of 3% to 5% of the amount of the loan. Various fees for file preparation will then charge by an attorney, financing processing fee, evaluation fee from an unbiased appraiser, and an application fee. Capital Funding Financial offers straight forward conditions without each of the concealed crap fees and costs an incredibly low origination fee of only 2%*

Can the loan fees be paid from your loan proceeds?

Yes there’s a huge enough equity cushion in the real estate. Most of the time all the fees (other than the application fee) are paid in the actual loan proceeds.

Is there a pre-payment fee with hard money loans?

For instance, with a 6 pre-payment fee, if the borrower should happen to repay the loan in 3 months, there would be 3 extra months of interest due. This condition is put in place in order for the lender receives at least a small return for the time, hassle and apportionment of its funds to a borrower. If the borrower repays the loan after six months, then no pre payment penalty will be issued.

How quickly can a hard money loan that is typical close?

At Capital Funding Financial, we’re a direct lender and have the ability to close loans within a few days when given a complete loan package (credit report, income documentation, independent evaluation, title commitment). The typical deal takes about a couple of weeks to finance as an independent appraisal and title report need to be run on the property.

When using is an evaluation required?

Yes, hard money loans usually demand broker price opinion, an assessment, or comparative sales analysis. We order an unaffiliated appraisal on the subject property.

When completing flip or rehabilitation project & a fix, what’ll the hard money lender require?

Besides the obvious 3540% equity cushion, the lender will want to see the scope of work described with a cost analysis timeline and worksheet. The lender uses this as helpful information in releasing resources for rehabilitation purposes. Nothing ever goes as planned when performing a rehabilitation; so the lender will need to see the borrowers experience in managing or performing property repairs. The lender require an inspection and will release funds in draws for such listed repairs. The lender may also require a credit report and income statement from the borrower showing that the borrower has the ability to repay the loan. Nevertheless, hard money lenders focus largely on the asset value of the security and not the credit score.

If you are looking for a hard money loan for a rehab, fix & flip, or investment purpose, contact us today at 954 320 0242 or toll free at 18666950092 or visit Hard Money Loan for more information.

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Capital Funding Financial Mortgage Notes:

Links:

Borrower- http://capitalfundingfinancial.com/floridahardmoneyloan

Investor- http://capitalfundingfinancial.com/hardmoneyloaninvesting 

Post source: http://capitalfundingfinancial.com

Ocala Florida Hard Money Lender

Ocala, Florida