Fix And Flip Hard Money Loan Terms, Rates, And Qualifications
With lower approval qualifications in general, fix and flip loans have minimal needs and maximum benefits. As an added bonus, most fix and flip lenders only take a week or two to provide the funds you need. The loan rates are higher than traditional bank loans because the loan term is shorter, usually only 12 months long. Interest rates usually start around 7.5% and can go up to roughly 12%, depending on the loan term (6 months to 3 years).
Monthly payments are interest-only, and the last lump-sum is paid off at the end of the loan term. Fix and flip lenders usually finance 90% of the property’s LTV (loan to value ratio) and 75% of the property’s ARV (after repair value).
Borrowers should have a credit score of at least 600, have some experience in fix and flip projects, and a debt to income ratio of 35% to 45%. The better the credit score and experience you have makes you more trustable, but as we mentioned earlier, a lot of borrowers’ credentials are overlooked because the lender is more interested in the value of the project.
Who Benefits From Fix And Flip Loans
Both the lender and the borrower benefit from fix and flip loans. And, you don’t have to be a borrower with tons of flipping experience to be able to reap the benefits. In fact, fix and flip loans are great for real estate investors who have 2-3 projects under their belt, first-time investors who have help from a private contractor, and fix and flippers that are competing with all-cash buyers.
Contact RTI Bridge Loans today to learn more about the benefits of fix and flip financing.
Where to Get Fix And Flip Financing Solutions In Los Angeles And Orange County
Fix and flip loans are provided by hard money or fix and flip lenders. Lenders are usually found in person at a firm or online. Online lenders have a prequalification process that usually takes a day, with full funds received in only 1-2 weeks. RTI Bridge Loans is one of the professional hard money lenders serving Los Angeles and Orange County, offering very competitive rates and reliable service for prime borrowers. Prequalification only takes minutes, and you can have your funds within a short two weeks.
Fix and flip projects are fun and challenging, but getting the proper funds for your project may seem pretty daunting. If traditional bank loans have you feeling tangled up, or you might have blemishes on your credit report, it might be time to opt for a hard money loan. These loans look beyond your past and help you build a better future. Though they have higher interest rates, the loans are created for a short-term timeline, and you only have to pay the interest rate every month. Think of fix and flip financing in the form of hard money loans as your gateway to being able to start your projects and finish them with ease. Call RTI Bridge Loans today for your own fix and flip financing needs!