Make the points on your hard money loan work for you.
by Paul Jackson, Principal
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Important things to know about points for hard money loans: Conventional mortgage loans are insured and regulated by the gov- ernment, and there are many rules in place that mortgage lenders must ob- serve. Hard money loans, on the other hand, are not insured by the govern- ment. Because hard money loans are essentially private agreements be- tween two investors, the lenders have more leeway in shaping the terms. There are a few important things that borrowers should understand about points associated with their hard money real estate loans: • Unexpected expenditures on your flip • Purchasing other properties or investments • Floating your loan longer if your property doesn’t sell quickly • A bigger cash cushion in your bank account while you fix the property Beware of shifting numbers. As you grow more aware of the relationship between ARV ratios, points and interest rates, you’ll start to develop a better feel for the types of deals that feel right to you. However, there is one major caveat: the adver- tised numbers that drew you toward one lender can change before closing.
Your lenders vet you. You should do the same with potential lenders. At Residential Capital Partners, we’ve built our business on repeat busi- ness by offering fair, firm quotes, and holding to them through closing. When it comes to points, you will always pay only three points, rolled into your loan—no surprises or bait-and-switch. Apply for a loan with transparent terms today. With Residential Capital Partners,
You’ll be hard-pressed to find a hard money loan without points—they’re essentially the fee for getting fast cash from a private lender for your flip. They’re the lender’s way of making money for extending you their funds. Each point is the equivalent of 1% of your loan amount and, depending on your lender, you can expect to pay between 2-10 points per loan either up front or at closing. Howmany points should you expect to pay? The number of points any given hard money lender asks depends on a number of factors: • Your past borrowing history with them • Your credit score • Your record of success as a flipper • The interest rate of the loan • Their standard operating model as lenders • The percentage of ARV or LTV being financed In addition, the size of the loan will impact the points. For example, a small loan of $50,000 might come with high points to cover the cost of setting up the loan, while a loan of $300,000 would typically require fewer points.
what you see is what you get. We offer three points, rolled into your loan every time.
Apply today in just 14 minutes. We can move
you through the approval process and help you close within just 14 days with absolutely no money down.
Why wait? Pre-qualify for a loan today in under 14 minutes on residentialcapitalpartners.com or give us a call at 866-441-0223.
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