Posted by Charlie Adams Jr on January 28, 2002 at 20:12:03:
Hard Money Lenders charge the points so they can charge a smaller interest rate so they do not get into trouble with usuary. For Ex: 13% interest with 6 points equal to 19%. 19% interest may be considered usuary in some states.
Hard Money Fees - Posted by Todd H.
Posted by Todd H. on January 27, 2002 at 10:19:07:
I am not very concerned over the rate that a hard money lender charges becasue my exit strategy is one that has me out in 6 months but the 7-12% in points in a BIG sticking factor for me. I have an excellent job, very good income, a great credit score but I do not understand the reason for the high points? Is that so the lender makes his money upfront? Is that only for those with bad credit? I thought that hard money lenders loaned money on the property value, not the buyer? Those that do require personal lending critera then are not really hard money lenders are they?
Can someone explain to me how you structure a deal where you have a buyer who will let you have the property at 65% of it’s ARV yet I will still have to pay 7% points to get the deal funded (7% of $65k = $4550)? I am using the numbers provided by Rehab Funding…(7-11% in points and you CAN NOT finance them into the deal). This does not appear to be a hard money lender to me becasue it is also based on my personal credit. Is this true?
Can someone tell me if I am missing something here and if anyone has any other hard money lenders they work with that will allow you to finance the points into a deal. I am located in NC and have sevarl properties that I ma working on so any help would be appreciated.
Thanks,
Todd H.
Re: Hard Money Fees - Posted by Brandon (FL)
Posted by Brandon (FL) on January 30, 2002 at 07:55:18:
I’ve talked to rehab funding a couple times. I would have went with them if I could of got around the same problem your having. If I had that much money to spend on a property at closing I don’t think I’d be in the position to need hard money.