Louisiana Hard Money Loans | Hard Money Loans 2023
Updated: Jan 20
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Hard money loans come with similar payment structure as traditional commercial loans, albeit with a much shorter term. They usually come in 12 month terms up to 3 years, with an interest-only payment structure. This means you only need to pay interest costs every month for the entire term.
With hard money loans, the lender approves a borrower based on the value of the property being purchased. The lender may do a quick check of your credit or finances, but in general, the process will be much less rigorous than with a traditional loan.
To calculate the total interest paid on a hard money loan, you essentially just multiply the monthly repayment amount, by the number of months that you hold the property for. So if your repayment is $1500, and you hold the property for 12 months, the total interest paid would be $18,000.
You can expect to pay anywhere from $500 to $2,500 in underwriting fees. Some hard money lenders also charge prepayment penalties, as they make their money off the interest charges you pay them. That means if you pay off the loan early, you may have to pay an extra fee, adding to the loan's cost.
They come with a lower loan-to-value ratio because of real property protection. They charge higher interest rates. The lender faces considerable risk. The lender may not provide financing for owner-occupied residence because of property rules and regulations.
Can I refinance after a hard money loan? The short answer is yes, but there are many things to know and understand before starting the process. For the most part, refinancing a hard money loan is similar to refinancing any type of mortgage, but it may not be as straightforward because you must pay attention to your hard money loan terms and conditions.
Hard money loans are a specific type of asset-based loans that are secured by real estate collateral. Hard money loans are generally given through private investors or companies. For example RCN Capital's loans are hard money loans which are backed by investor's non-owner occupied residential real estate.
Monthly mortgage payments on a 1 million dollar home will depend on several factors, including your credit score, down payment, term, and interest rate. Generally speaking, on a 30-year mortgage with 20% down, you can expect to pay around $4,500 in monthly mortgage payments on a million-dollar home.