Financial questions can be some of the most complicated and difficult to navigate in our lives. One of the hardest things to understand can be a hard money loan. Hard money loans are interest-based, short-term loans for a non-owner-occupied property. To feel confident in their loan choice, most people will need to ask a hard money lender specific questions about the process and what a hard money loan is to fully understand what they’re getting into. That said, here are a few important questions to ask a money lender.
Do I Qualify for a Hard Money Loan?
A hard money loan is designed for someone who doesn’t live on their property. Commonly, this is a landlord or someone who can’t live in the home for one reason or another. However, that’s just the start of the rules that surround hard money loans, and you’ll find that a money lender is able to help explain the details beyond what would qualify you for one of these loans and if it’s the best option for you.
How Long Can I Take Out a Hard Money Loan?
A hard money loan is designed to be a short-term loan. At the absolute maximum, a hard money loan would be taken out for two years. Hard money loans are most commonly taken out for one year. It’s recommended to speak to a professional who can lend you their expertise and help you decide the right loan length for you.
What Interest Rate Can I Expect?
By their nature, interest rates are fluid to when you are looking to take out a loan. That’s why it’s important to pay attention to interest rates and check in with different banks to see what interest rates they might be offering. With that being said, you can typically expect between 10-18%.
Can the Money Be Used for Repairs?
The short answer here is yes. You can use the money you get from a hard money loan to make repairs. In fact, this is fairly common as hard money loans are typically taken out by property owners who don’t plan to live in the property during the duration of their loan such as house-flippers or renovators.
If you’re interested in taking out a hard money loan, or if you would like more information on what taking out a hard money loan entails, contact the professional Los Angeles private lenders of GW Private Capital today.