Posted by Nate(DC) on July 19, 2002 at 21:38:51:
No, interest is typically quoted on a per year basis. 15% interest would be 1.25% per month.
NT
Hard Money Amoritization - Posted by George
Posted by George on July 19, 2002 at 12:36:31:
Hard money questions>>>
Are HM loans repayable with monthly payments, like a regular mortgage, or do you pay back the lump sum at the end of term, or sooner if possible.
Are most HM loans done so on annual rates or is the interest charged on the sum of loan. So if it is an annual rate, I save money if I can flip or wholesale quickly. Also, is there early re-payment fees if I can re-pay loan early.
Will they find me and break my legs if I default?
Thanks for your insight
George
Re: Hard Money Amoritization - Posted by Nate(DC)
Posted by Nate(DC) on July 19, 2002 at 14:34:49:
"Are HM loans repayable with monthly payments, like a regular mortgage, or do you pay back the lump sum at the end of term, or sooner if possible. "
Most are interest-only with a balloon payment at the end of the term. The term is so short (1 year or less) than any amortization would either be so insignificant as to be meaningless, or so drastic that it would defeat the purpose of getting the loan.
“Are most HM loans done so on annual rates or is the interest charged on the sum of loan. So if it is an annual rate, I save money if I can flip or wholesale quickly. Also, is there early re-payment fees if I can re-pay loan early.”
Generally interest is charged monthly. You pay for the months you actually use. So, yes, the faster you pay it off, the less interest you pay.
I would ask the lender whether they have any prepayment fees. I know of some that do and others that do not.
“Will they find me and break my legs if I default?”
This depends. If you are in New Jersey or New York, maybe.
JOKE!!! Actually what will happen is they will foreclose and take the property.
NT
Re: Hard Money Amoritization - Posted by George
Posted by George on July 19, 2002 at 14:47:12:
Thanks Nate!!
Is the percentage (interest) monthly then? An loan with 15% interest is that per month?!?!?!
Ouch.