A hard money loan calculator can help you determine the cost of your loan, based on the amount and interest rate you’re looking at paying. This way, you can get an estimate of the total cost before you start shopping around to see which lender will offer you the best terms. It’s good to know exactly how much cash you need in advance so that you can narrow down your options and choose the best possible lender for your situation. The following steps will show you how to get started with our hard money loan calculator!
What is a hard money loan?
A hard money loan is a type of financing in which a business owner borrows cash from private investors. These loans are typically approved in shorter timeframes and have higher interest rates, so it’s not a good idea to use them to finance long-term investments.
Though the loan process can seem intimidating, understanding the basics of hard money loans will put you ahead of the game! Here’s what you need to know about this type of financing
Why do you need one
A hard money loan is a form of real estate financing that serves as collateral to the lender. If you want to learn more about the cost of your hard money loan, all you need to do is follow these simple steps.
Figuring out the price of a hard money loan is as easy as inputting your property details into our calculator! Take a look at our terms and rates for hard money loans here.
The Loan Process
– Approve the loan through your lender, it will take about one week to complete. We offer a variety of loans including competitive rates and terms, such as 20-year fixed or 10-year adjustable.
– After receiving your approval, send us the following documents: application form, proof of income, business financials and personal financials.
– A review process will happen within 3 days to ensure that all documents are acceptable. If all documents are not submitted in a timely manner there may be a delay in the loan being funded and reviewed. If everything checks out then we’ll send you a pre-qualification letter confirming your specific details before completing any paperwork.
Signing the Note
Borrowers should also take note of the interest rate as this will vary from one lender to another. There are no set guidelines that state what a hard money loan’s interest rate should be, but in most cases, it will range between 10% and 18%.
Because borrowers are borrowing against the asset they want to purchase, they won’t need mortgage insurance.
Understanding Rates, Points, and Other Costs
A hard money loan is a great alternative to traditional financing methods when you need quick access to funds. There are three main factors to take into consideration before deciding on a hard money loan: the interest rate, points, and other costs associated with the loan. Let’s start by looking at interest rates. An important question to ask when considering an alternative lender is What’s my total cost of borrowing? This includes your interest rate as well as any points and other costs associated with the loan.
Closing Costs Explained
All loans have costs that are built into the borrowing amount to cover such things as commissions, application and processing fees, points, appraisals, title fees, and more. Sometimes they are included in the interest rate you are quoted and sometimes they are not. Knowing the total cost of your loan before you get one is important so you can plan your budget accordingly.
Where to go from here
If you want to know how much your hard money loan will cost, head over to our hard money loan calculator. There you can input some of the parameters of your desired hard money loan and get a quick estimate of what it will cost.