Will you roll in closing costs and points?
Usually, the borrower pays the closing costs and points. In certain situations, if the LTV is low enough, we will roll in the closing costs and points.
Which loan should I pick? 13.9% and 3.9 points? or the 16% and 6 points fully amortizing loan?
If it is a property in a rental neighborhood, we will require the fully amortizing loan. If it is a property in a good area where refinancing is available, we will allow the traditional hard money loan. Don’t worry, if you end up with a 16% and 6 point loan, and you pay the loan off within 8 months, we will refund the difference.
My credit is bad, can I still get a loan?
Yes. While we will look at credit and credit scores, it’s not the most important criteria. The equity in the property is most important, followed by cash reserves, then your experience and then credit scores.
Why are cash reserves so important?
The primary way that private lenders lose money is when the borrower runs out of money in the middle of the project. It’s critical to us that you have enough working capital. The amount of working capital required will be different for different loan scenarios. We determine the amount of cash that is needed for your loan based on the bullet points below. You will need to show proof of funds prior to the approval of the loan.
- Points and closing costs
- Fronting of the construction draws (we will inspect and pay the money due for a construction draw after the work is completed
- Monthly Payments
- Difference in what you are budgeting for the rehab, and what we think it will take to get the rehab done using our contractors.
- “Oh by the ways”. Rehab projects never go as planned. We want extra money available in case the project exceeds the construction budget.
I want to apply for The Rental Loan, what is the best way to get approved?
- Have a good quality property that is 50% LTV or less.
- Have the property rent ready and lead paint certified (We can help you with this, CLICK HERE) prior to the closing of the loan.
- Have experience as an operator of rental properties.
- Have a large cash reserve.
Will you do a cash out refinance?
Yes, as long as the money is used for a commercial purpose.
What are the loan minimum and maximums?
The minimum is $15K, there is no maximum. The maximum is determined by our comfort with the project and our available funds.
How do the construction draws work?
After we approve the loan, you will use our form and create a draw schedule. For example if it’s a $20,000 construction draw, broken down into two $10,000 draws, you would get the first $10,000 of work done, and then we’d come out and confirm the work was done. We can then pay the draw with a check, ACH or wire ($30). The main point is that the construction draws are paid in the arrears.
What happens if you come out to do the home valuation, but then I can’t get the property under contract, do I receive a refund on the $295 home valuation fee?
As a rule of thumb, if we ‘pass’ on the loan, we’ll refund the fee, if you don’t close, or choose to go with another lender we keep the fee. We put a lot of work in getting you approved, and once you pay the home valuation fee, we set the money aside for you, which means we can’t lend it to other people.
How much are the closing costs?
We can’t really answer that for you, because it’s between you and the title company. We can, however, tell you what our fees are:
- $295 Application/Valuation fee
- 3.9 Points
- $95 per draw (for any draws taken)
- $600 to King Title to prepare the loan docs and review the title work (this fee is waived if you close at King Title)
How fast can I be approved for a loan?
If you call today, we can usually have you approved by tomorrow night. Sometimes it takes longer depending on the deal.