With the real estate markets rebounding I am finding more and more investors willing to get more aggressive with the rates they are willing to take on their hard money loan investments. Recently I've seen a trend in California commercial hard money rates falling. This includes hard money loans for commercial properties, apartments and even non owner occupied investment 1-4 SFR properties.
For well qualified borrowers rates can dip into the single digits on these types of transactions. While most of our loans are still going out at the higher rates, we are increasingly able to do better on low loan to value transactions or hard money loan requests where the guarantor has a credit score of 650 or above. For the above mentioned transactions to borrowers with credit of 650 or better, it is not out of the question to be 1-2% lower than our typical rates - in some cases there is even more of a savings.
Our loans are priced on a number of factors, but the most important factors for these lower hard money rates are property (type, location and loan to value) and credit (650 or above allows us to really be competitive with regards to rate). Even if your credit is poor, a property in a great location with a low loan to value can potentially help us past that roadblock. If your credit is good, however, we will have more flexibility with regards to loan to value - sometimes being able to offer single digit rates up to 70-75% loan to value.
As the market continues to improve I expect this trend to continue - higher loan to value options at lower rates for quality properties and for borrowers with good credit. If you have a California hard money commercial loan, give us a call today to discuss the options we can provide. Usually we can give you an indication of how we can help with a brief phone call. For more information on the hard money products we offer here in California, please visit us on the web at www.acalending.com.