Frequently Asked Questions
about real estate + business investment lending mortgages
What does it mean when they say, “3-5 year fixed rate, 25 or 30 yr. Amortization or “Amortized” 25-30 years?
A. As it relates to the statement,” 3-5 year fixed rate, amortized 25-30 years”….This means that the loan will be at a particular fixed rate for 3,4, or 5 years, but the payment you will be making will be calculated as if the loan was spread out for 25 or 30 years.
If the loan was simply calculated at being paid off in 3-5 years, the payment would be through the roof. Therefore it’s calculated the same as any 25 or 30 year mortgage would be calculated. i.e…loan amount, interest rate, and term. The difference here is that at the end of the fixed period, a “balloon” payment will be due unless you choose to refinance at the then current interest rates, which could be more or less than the time you took out the loan.
What interest rate will I get?
A. You, the borrower and the property you are purchasing or refinancing determines the interest rate. For you it is your credit scores and asset ownership. For the property you are purchasing or refinancing, it’s the property class, it’s type, location, etc.
How long does it take to close?
A. Typically, on a single family residential purchase/rehab loan, 10-15 business days, a smaller commercial purchase or refinance up to 20 days…Larger multi-unit properties and larger commercial conventional loans can approach 30 days.
What collateral can I use to get a real estate loan?
A. Most hard money lenders will use the equity in the real estate as collateral for your hard money loan. We get a little more creative to get you approved. For example, we will consider cross collateralization. And, to get you better terms we have a ‘Property Experience Program’ that can take into account:
Your prior investing experience
Your entity’s credit
Your partner’s credit
Your entity or partner’s prior investing experience
We can occasionally look at non-real estate items using creative collateral here.
What’s the difference between a Bridge Loan and a Hard Money Loan?
A. Both a Bridge loan and a Hard Money loan can provide needed funding that’s needed quickly, or at a time when the purchase or the refinancing will not quite qualify yet for a conventional, long term loan. They provide a “bridge” to carry you over until you can get permanent financing, or sell the property. The main difference between the two is the SOURCE of the funds…A Hard Money loan is typically derived from a lending source that charges higher fees due to riskier loans that they will undertake.
Apply for a commercial hard money loan today by calling (260) 436-5000 or fill out our confidential funding application.
How much of a down payment do I need?
A. It varies from product to loan product. It’s based on the loan to value that we offer based on your application. Go here and then click on any of our loan product offerings to find a list of the loan parameters,including the loan to values offered.
What is a “loan to Value”?
A. The loan-to-value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. The term is commonly used by banks and building societies to represent the ratio of the first mortgage lien as a percentage of the total appraised value of real property.
Why can’t I live in the Residential property that I’m buying?
A. There are certain foreclosure laws and guidelines that pertain to individuals rights when it comes to eviction as the result of default. The loans that we make are business loans. We would be limited by the residential eviction guidelines that are afforded families and individuals, as it pertains to length of time a lender must wait before they can foreclose on a property that is the personal residence of an individual. Foreclosing on business loans due to loan default are not subject to those same guidelines,usually allowing foreclosure much sooner than on an individuals personal residence.
What’s the difference between a Refinance and a Cash Out Refinance?
A. A refinance is strictly refinancing the current loan or loans on a property at different terms that the borrower may currently have on the property. Refinancing is done usually to get a better interest rate OR to get out of a short term,interest only bridge type of loan. A Cash Out refinance is to seek a refinancing of the current loan in addition to getting cash.
It is usually done to make improvements to the property, buy a partner out, or in some cases, re-invest in another business. There’s less emphasis on getting a lower rate since in most cases,a cash out refinance rate will be a little higher,side by side to a strictly refinance loan. Applying for funding is free and it doesn’t effect your credit.
THE
We Lend Money
DIFFERENCE
Our creative financing background makes it easy for you to get approved and why we're the hard money lender recommended more than any other for fast, creative funding options on residential and commercial investments and business lines of credit. Try our paperless funding application.On a fix and flip loan, when will I receive my rehab funds?
A. Typically, the rehab portion of the loan is held in an escrow account and wired to you as the renovation progresses. You will be given a certain portion to start, then that part of the rehab will be inspected before more funds are released. This will continue until the project is complete.
FAST QUOTE
OUR GUARANTEE:
Whether we process your loan in-house or with our partner lender you are backed by our We Lend Money Guarantee™ so you have peace of mind of a timely, professional closing and our years of experience in real estate and business.
“Flexible underwriting allowed me to close fast even with a