HML Verses LTV?
When you go to get a hard money loan, can you get the 65% LTV loan amount even if you are purchasing the house for under the 65% LTV?
EX.
ARV $100k
Purchase price $50k
LTV $65k
Will a hml still give you the $65k and you pocket the $15k left over?
Thanks!!
No, they will not. Hard money lenders (in general) will make sure you do not walk away with any cash from the table. They will, however, escrow the repairs necessary and usually roll in closing costs.
-Chris
[addsig]
Quick question...how do the HML determine what they think the ARV is? Will they go based on what you tell them? Also, they will allow a remodel/repair allowance, but put it in escrow..correct?
I was looking at some of the rates for HML, and they seem to be 15% or so for 2years? Is that accurrate? I guess you need to fix and flip in a hurry, huh? Both HML I saw on the lenders tab, asked for a min. 620 credit score. Is that always the case? Thanks in advance.
Brian[ Edited by suntzu18 on Date 02/22/2004 ]
Those 620 guys are full of it. If i had 620 I would go to Wells Fargo or Bank of America and do loans. I have been approved by 2 HML and am in Chapter 13. The deals should support the money. I have gotten cash at closing with HML lenders but pretty rare. When they found out they made me pay 6 months payments up front. Still got 5 grand.
Good LUCK and Thank You
Hope this helps some
Ted Jr
The ARV is determined by appraisal and comps just like any other house. Most HML have prefered people they use, and what you tell them has little influence.
Yes, the rates are accurate. They are horrible at best. Check with your local banks and you may secure prime financing. I have a local bank that will finance up to 80% LTV, escrow repairs, and only charge 8.5% interest with one point. They do require a 10% down payment, but will finance closing costs into the loan.
Most HML don't care what your credit score is. They review your credit to make sure you pay your bills for the most part. I looked into the lenders here at TCI and was totally unimpressed. Shop around and find the best deal. It could save you thousands....
-Chris
[addsig]
Thanks for all the replies. The president of my local REI said HML's don't give cash back just like some of you mentioned.
I appreciate the input.
Y'all have a nice day.
Why in the world would you want cash back from a HML? That's some EXPENSIVE money. MUCH easier, and cheaper, to finish the rehab, and get your money back on the refi.