- What is the traditional process for Hard Money Loans in Los Angeles, CA?
Hard Money Loans provide Investors the opportunity to purchase investment properties. In addition, Most Los Angeles Hard Money Lenders say they can fund almost right away, usually within 72 hours of receiving the final docs from the Title Company. For the most part, Los Angeles Hard Money Lending Companies say Hard Money is available for decently collateralized loans on single-family residential houses and other Real Property including commercial projects.
- What is the interest rate on a Hard Money Loan in Los Angeles, CA?
The interest rate depends upon the Lender. The rate will range from 8% interest only to 18% interest only annual interest rate payable monthly in most cases. A few Los Angeles Hard Money Lenders will defer interest payments to payoff, ultimately benefiting investors that do not want any sort of payments during the actual rehab.
- What Loan-to-Value are Hard Money Lenders seeking?
Usually, a loan doesn’t exceed 70% of the after-repaired-value (ARV). This figure is calculated by an appraiser and consideration of repairs.
- Typically, how long is the Hard Money Loan for?
Typically the notes will range from 3 months to 12 months depending on the Los Angeles Hard Money Lender and your needs. But do take into consideration that the longer the term can lead to increased costs or interest rate.
- What are the costs of a Hard Money Loan in Los Angeles, CA?
Los Angeles Hard Money Lending Companies say that all loans will require Title Policy, Insurance, and Appraisal. These services will endure fees that can range from a few hundred to a couple of thousand dollars. A high percentage of them require origination points ranging from 2 to 10 points.
- Can I Get Money Pay For Repairs?
Yes. Most Los Angeles Hard Money Lenders require a “Draw Request” form to be filled out to identify the completed repairs to the property, copies of the invoices from the contractors or sub contractors. After work is inspected, draws can be dispersed. Typically work is not paid in advanced.
- Does My Credit Matter?
Los Angeles Hard Money Lenders do check credit, not necessary for credit scores, but rather, to check for bankruptcies, foreclosures, charge offs and collections. Furthermore, they look for ability to repay. The loan is more collateral based, which generally means they look really closely at the property.
- Do I need to put any money down for a Hard Money Loan in Los Angeles, CA?
Most of the time, Yes. A handful of Los Angeles Hard Money Lenders want to ensure that you have enough resources to finish the repairs and cover the costs of the loan plus any surprises. Expect to pay all origination/discount points and other costs at or before closing. If you cannot afford to close you typically cannot afford to take out this type of loan.
- Can interest to be deferred to the end of the loan?
Sometimes. Most have interest payable monthly. Once again, if you can’t afford to close you generally can’t afford to take out this type of loan.
- How does Hard Money compare to a conventional non-owner occupied investor loan?
Hard Money Loans have a very specific purpose. Typically these loans are for quick turn around or after repair situations.
Traditional financing is used for your traditional rentals and long term hold scenarios. Los Angeles Hard Money Lenders say that as the foreclosure market increase you will find investors to use Hard Money as way to secure the property in a short period of time then refinance into traditional finance.