I am new to creative investing and trying to better understand hard money loans. Specifically points and interest rates and how to calculate those numbers.
Hard money loans are based on the value of the asset, not the borrower. These types of loans are more expensive and carry premiums in the form of points - 1 point is equal to 1% of the loan amount - and may carry prepayment penalties and fees. They are easier to get and are widely available in every state. As long as the numbers work and you can make money on the deal, hard money may be the way to go.
Calculations…you need to know three variables to solve the fourth one. So if you want to know what your monthly payment is, you’ll need to know the principal amount, term, and interest rate.
Free loan amortization tables are widely available online.
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