Hi Phil, the terms and conditions of a Hard Money Loan could depend heavily on the property you are looking to place the financing on. Do please reach out to Taylor about those terms but I can give some numbers on the permanent financing if you ever needed it. For example, if you purchased the property and were looking to keep it long term to rent. A hard money loan is a shorter termed loan. Anywhere from 6 months-18 months generally. So what would you do after the 6-18 months is over if you were looking to keep it? To refinance out of the hard money loan a conventional loan requires 25% of equity in the property. Or to put it in another way, they will lend you 75% of the After Repair Value (ARV) on a property. So if your property was worth $100,000, the most you could refinance is $75,000. This is important because if you found a home to buy for $50,000, and it needed $30,000 in repairs, but it was worth $100,000 ARV...then you could only refinance $75,000. Meaning you would need to bring about $5,000 to closing when you refinanced. Now, paying $80,000 for a $100,000 home is still a great deal but sometimes bringing $5,000 extra to closing is a big deal if you didn't know about it ahead of time.
These rules are for a "conventional" loan. Conventional loans are the loans governed by Freddie Mac and Fannie Mae (if you recognize those names). Conventional loans have the lowest, 30 year, fixed rates. You can go above 75% with a "portfolio" loan though. A portfolio loan is a loan type that is governed by the bank itself and it outside of the Fannie Mae/Freddie Mac guidelines. But since it is up to each individual bank (because it is their money essentially) the terms of a portfolio loan can differ greatly from bank to bank. They may only offer a 20 year term (which would make your monthly payment higher since you have to pay it back quicker) or the rate might be an adjustable rate. But they could also offer 80% of the ARV if they wanted to. If you are flipping the property you may not even need permanent financing but hopefully this information helps in some way.
