Just How Are Hard Money Loans Calculated?
If you’re looking to invest in real estate, you may be considering a hard money loan. However, you may have asked yourself, “how are hard money loans calculated?” There are many things that make hard money loans different from traditional loans. One important feature is that hard money loans are short-term in contrast to more traditional loans.
Generally, a hard money lender offers loans to those purchasing investment properties, such as the typical “fix and flip”. Another of the things that make hard money loans different from more traditional loans is their availability to borrowers who may not be able to receive other types of loans. But there are still plenty of things to look at more thoroughly to understand the hard money loan process and what you can expect with hard money loan payments.
The BMC Difference
Hard money loans received their moniker because they look at “hard” assets. When getting a hard money loan for the purpose of real estate investing, that asset is the property itself. When calculating the loan, lenders take into account the length of the loan. Typically, lenders base the loan length somewhere from 6 to 12 months.
Lenders generally take several factors into account when calculating hard money loans. The loan will be based on either the “as-is value” of a property or the after repair value (or ARV). It may be possible to get a large percentage of the ARV when obtaining a hard money loan. Some borrowers are eligible for enough to pay for both the purchase price and repair costs. This is often ideal for those who are looking to “fix and flip” or “fix and hold” a piece of property.
However, the exchange of fees for rates is typically not a good deal with most hard money lenders. However, Bay Mountain Capital is unique as a hard money lender due to our ability to work with our customers. We ensure our borrowers and brokers understand the total costs of their loans.
The Bay Mountain Capital Hard Money Loan Calculator
Those who want to know how much they might potentially qualify for can use our hard money loan calculator. The BMC hard money loan calculator has you input information to provide an estimate of possible loan payments. These loans include the purchase price of the property if applicable, the total rehab amount, the ARV, and the individual’s credit score. Individuals with more experience will also typically be able to receive better loan terms. You should also note that BMC will evaluate those individuals with a lower credit rating on a case-by-case basis.
Overall, BMC makes it easier to get a loan that you can be certain you’ll be able to afford in the long run, with terms that work for you rather than against you. If you’re interested in working with Bay Mountain Capital as a hard money lender, you can use our hard money loan calculator today to find out how more about terms, fees, and how much you can expect when working with BMC.
About Bay Mountain Capital:
Bay Mountain Capital has been in business for more than a decade, closing approximately 2,000 loans. We specialize in financing all types of residential and commercial property investments throughout Texas and Georgia. Using common sense and value-added approach, we strive to incorporate these principles into our underwriting and closing processes.
As a direct lender, Bay Mountain Capital can close a loan within one day after receiving a complete file and clear title. The process generally takes two weeks for a residential loan but can be accelerated where circumstances require it.
We are primarily an asset-based lender, which means that qualification requirements are limited. Our rates and fees are among the lowest in the industry.