As many of my readers know I am a Mortgage Broker in South Florida (Palm Beach Gardens) and work with several different lenders. Throughout my years in the business I have built up a reputation for Hard Money Loans, Jumbo, Super Jumbo's and Sub-Prime Mortgages. Lately, I have seen a big surge in Hard Money lending and have received many inquires as to them.
The phone call or E-Mail usually starts off with "Can you Give me Your Rates on Hard Money Lending". To me this is the same is if someone is asking what is your rate today on a conforming A+ loan? A good Loan Officer/Mortgage Broker can't answer that without having more knowledge about what your needs and wants are. Hard Money Lending is NO different.
LENDERS/INVESTORS WANT TO KNOW THE FOLLOWING:
- Credit. (Yes credit is looked at, but as a guide)
- Loan-To-Value. No it is not a standard 65% across the board some will go higher some will go less
- Type of Property. Condo's, Single Family, Duplex, etc......
- Documentation. No this is not a typo Lenders DO NOT Want Your property. They want to see the ability to repay the loan. Yes you can still go "No Documentation or Stated" however, pleaser keep mind of the previous bullets.
- Exit Strategy. This is for Investors.
- Purchase Price or Appraised Value. Yes Some Hard Money Lenders will still go off the Appraised value and not the Purchase price.
So What is My Rate?
Now that you see everything that goes into a file (looks familiar) you can see why I don't advertise rates. The reality is I have some lenders/Investors that can start in the 10% and go as high as 18% depending on all of the above. In addition, the points to do these loans can be as low as 3 points or as high as 10 points. (point = 1% of loan amount) It all goes back to the complete file not just something I pulled out of thin air.
In closing, when searching out one a Hard Money Lender be prepared to give the full financial picture of what you are trying to accomplish. Let's face facts you don't go to these type of lenders because the rate is so good. You go their because of time, guidelines or because of credit issues. NOT RATE.
For More Mortgage Advice: Mortgage Advice in South Florida
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Matthew - So I'm looking to invest in some properties in that area, what's my rate going to be anywhoo? I saw this commercial the other day and I understand they are still low....
Seriously, very concise & well put amigo! The bullet points you stressed are vital in understanding how the process works. Smart & informative post!