I'm trying to understand how exactly a hard money loan works but there a few things about it that I'm still confused about. My understanding is that a hard money lender will typically lend me 60-70% of the potential ARV value of the house. Would I need to make a down payment to get this loan? and will the loan typically cover the total cost of the property because if 60% of the ARV doesn't cover the cost of the house would I have to pay for the difference myself? and what about the repairs do I have to pay for that or will the lender cover it?
Also how long is the term for a hard money loan typically, a year, 2 years? and how often is it compounded? A 12% interest rate on a loan compounded weekly for example could result in me actually paying around 15% or so by the end of the year.
If someone could give me a scenario of a hard money loan that they made or received that would be much appreciated as it would answer most of these questions.
Also how long is the term for a hard money loan typically, a year, 2 years? and how often is it compounded? A 12% interest rate on a loan compounded weekly for example could result in me actually paying around 15% or so by the end of the year.
If someone could give me a scenario of a hard money loan that they made or received that would be much appreciated as it would answer most of these questions.
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