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Can you turn a hard money loan into a mortgage?

Sam M2022-11-07T13:42:18+00:00In short - yes. The process of turning a hard money loan into a mortgage is called "refinancing." To refinance a hard money loan, the borrower must first obtain a new loan with more favorable terms. The process of refinancing a hard money loan into a mortgage is not always simple and can be done with the help of a professional lender. In general, the borrower will need to provide proof of income, assets, and employment. They will also need to have good credit to qualify for the best terms possible. Once the loan is approved, the borrower can use the...

Are there any prepayment penalties with a hard money loan?

Sam M2022-11-07T14:46:59+00:00A prepayment penalty is a fee that lenders charge borrowers for repaying a loan before the end of the loan term. This fee is typically calculated as a percentage of the loan balance, and it is designed to compensate the lender for the loss of interest that results from early repayment. One of the main advantages of hard money loans is that they do not have a prepayment penalty, meaning that borrowers are free to pay off their loans early without incurring any additional fees. This flexibility can be helpful for borrowers who anticipate being able to refinance their loan after...

What are the fees associated with a hard money loan?

Sam M2022-10-24T10:27:54+00:00Hard money loans have higher origination fees than traditional loans since they are considered to be higher-risk loans. You may also be required to pay points up front, meaning a percentage of the total loan amount. Borrowers should be aware of hard money loan fees before taking out short-term financing: Origination fees are charged by the lender at the time of loan origination and range from 2-5% of the total loan amount. Also, hard money lenders require borrowers to pay points, upfront fees that cover the costs of servicing the loan. Points are equal to 1% of the loan amount and...

How much can I borrow with a hard money loan?

Sam M2022-10-24T10:26:57+00:00If you need a large sum of cash, a hard money loan may be the right option for you. With a hard money loan from LBC Capital, you can borrow up to $15 million. Though the interest rates are higher, the loan terms are very flexible, making them a good option for those who need quick access to funding. Hard money loans are used for real estate transactions, such as purchasing a property or fixing up a property for resale. But they can also be used for other purposes, such as starting a business or funding a major purchase.

What are the points of a hard money loan?

Sam M2022-10-24T10:26:26+00:00One point means 1% of the loan amount. For example, on a $350,000 loan, one point would be $3,500. Points are typically used to buy down the interest rate on a loan. The more points you pay, the lower the interest rate will be. Hard money loans usually have higher interest rates than traditional loans because they are considered to be higher risk. As a result, borrowers often use points to try to reduce their interest rate and make the loan more affordable. While paying points does increase the upfront cost of the loan, it can save money in the...

Can I get a hard money loan with poor credit?

Sam M2022-10-24T10:25:51+00:00If you're thinking about getting a hard money loan, you might be wondering if your credit score will be a factor. After all, bad credit can make it difficult to get approved for a traditional mortgage. However, with a hard money loan, your credit score is not nearly as important as your equity stake in the property. Such loans are based on the value of an asset, rather than on the borrower's credit score. So, having enough equity to meet the lender's requirements, you should be able to get approved for a loan.

How to qualify for a hard money loan?

Sam M2022-10-24T10:25:11+00:00Hard money loans are easy to qualify for and can be a great option for borrowers with bad credit or limited income documentation. However, there are still a few requirements to take into account: A borrower must have equity in the property used as collateral. A borrower must be able to prove that they can repay the loan. It can be done with a pre-approved sales contract, proof of income, or other financial documentation. The property used as collateral must be in good condition and located in an area favorable for real estate investment. If all of these requirements are met,...

What is a hard money loan?

Sam M2022-11-22T08:12:56+00:00A hard money loan is a type of short-term financing backed by collateral instead of your personal credit history. Hard money loans are used for the purchase of investment property and are made by private investors or lending companies. Hard money loans come with higher interest rates compared to traditional bank loans. Such loans are usually shorter in terms lasting only 12 months. However, borrowers may be able to extend the loan for an additional 12 months if needed. While hard money loans can be a more expensive option, they can be a good choice for borrowers who need fast...