Crunching numbers on hard money lending
So what are some of the benefits to a hard money loan? Well, here’s some numbers for your calculator to lick up. But first, remember that a hard money loan is a form of asset-based borrowing instead that deals with real estate. What part? The most important part, of course – the financing. Also, some borrowers also pursue Arizona hard money loans when their financing needs are super urgent and more traditional and conventional financing sources cannot respond in time.
Here are those numbers, as promised:
In many cases a hard money lender Arizona will offer a smaller loan size based upon a lower "Loan To Value Ratio". This only means they may opt to loan no more than 65% of the property value. Therefore it is more common for real estate investors to offer additional real estate as collateral in order to obtain a larger loan amount. This is known as cross-collateralization.
65%? Why that’s nothing! Right? What would your original typical banker say to that? I’ll bet he couldn’t control himself.
Also, you should know Rates vary from 12%-18%, additional interest or origination points may vary from $700 to 4% of the loan amount; depending on the project, terms range from 3-24 months and loan to value (LTV) can be up to 80%.
So now that you’re starting to see the benefits and the more financial side of things, you may want to check out some hard loans and see how they’d work equally or even better for you than a traditional, boring loan.
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