Address: 14285 Midway Road, Ste. 345, Addison, TX 75001
States They Lend In: Texas
What is a hard money loan?
A hard money loan is a short term loan, secured by an investment property (i.e., one used for business purposes only), designed to provide both the funds for purchase and also for the repairs. The benefit of using hard money is it allows you to leverage your money so you can borrow more with less down, close faster than with any other type of financing, and put another set of expert eyes on the property, lowering your risk and maximizing your return in the deal.
What is the average hard money loan duration?
Most hard money loans that are for rental properties pay off in 90 days or less. If the repairs are completed in 30 days or less, and you immediately get it rented, your tenant will be making your payments. We have actually had some clients refinance in under 45 days. On properties being flipped, the current average loan duration for our clients is 120 days.
How are we different from our competitors?
Competitor hard money programs are for 6 months and then the lender charges you extension fees if your loan goes beyond this timeframe. As much as you try to anticipate everything that can happen in a deal, things can pop up that you may not expect and you may be stuck in hard money for longer than you anticipated. Investmark Mortgage does not penalize our clients by charging them additional fees. We can actually structure our loans to go up to 18 months with no extension fees! There are many other ways in which we differ from our competitors, learn more here.
|Investmark||Competitor 1||Competitor 2||Competitor 3|
|Loan To Value (LTV)||Up to 70%||Up to 70%||Up to 70%||Up to 70%|
|Term||Up to 18 Months||6 Months||6 Months||6 Months|
|Extension Fee||$0||2% After 6 Months||1% After 6 Months||1% After 6 Months|
|Total Costs (for 90 Days)||$6,708||$7,141||$7,970||$8,618|
|Your Costs as a Factor of the I.M. Costs||6.5% More||19% More||28% More|
The above matrix is based on actual data taken from our competitive analysis with our top 3 competitors. There are other competitor programs not listed here that offer lower interest rates, but after you include all of their fees, the loan costs are significantly higher than Investmark Mortgage. The terms and fees listed here represent actual data taken from settlement statements, loan docs, and/or information received directly from borrowers. We are committed to updating this as the market changes and as we receive new information. The calculations below represent a loan amount of $100,000 with 20% allocated for repairs. Investmark Mortgage does not charge interest on the repair holdback until borrowed. Our competitors do charge interest on the total note amount, which increases the borrower’s costs.
Closing costs are a function of the title company and are not included here. Additionally there will be hazard insurance, which is based on the provider you select. Fees we do not collect that are part of the loan include an appraisal fee of $400 paid directly to the appraiser, a survey (only if required) of around $375, and flood certificate of around $20. Competitor costs for appraisals and surveys are about the same. All loans on properties being purchased for rental have a maximum LTV of 75%. Loans for flips have a maximum LTV of 70%. We split our fee 1% up front and 2% upon payoff. This allows our clients to bring less money to the purchase closing and potentially roll in the additional amount if refinancing, or roll it into their payoff upon sale. Investmark Mortgage does not charge any legal fees on any loan where title to the property is in a personal name. If you take title to the property in your company name, there would be a legal fee of around $350 from our attorney to verify the loan documents and make sure that the company is in good standing.
Once we have everything we require, we can usually close the next business day. We require the following items to close:
- Your executed contract
- Your repair estimate
- The appraisal we will order
- Your insurance binder
- Title company docs
What type of investor uses hard money?
All types - from new investors to very experienced investors, and from those buying rentals to those buying properties to flip. Anyone wanting to use leverage and put less of their own money down on a purchase uses hard money.
Where does Investmark loan?
We cover North Texas, primarily the Dallas Fort Worth Metroplex, and Central Texas submarkets, San Antonio and Austin.
What is a direct lender?
A direct lender funds transactions from their own private capital. This means there is no 3rd party (broker/middleman) in your loan transaction, keeping your cost to a minimum. Direct lenders also approve all loans internally. Investmark Mortgage is a direct lender.
What types of properties meet our lending criteria?
We loan on single family residential properties that are used for investment purposes. Investment purposes include properties to be used as rentals and properties to be rehabbed to sell (flip). Condos and town homes do not meet our lending criteria. We require that all properties have an ARV (after repair value) of greater than $90,000.
Does Investmark loan money on any property that is or will be the borrower's homestead?
No. All of our loans are for business purposes. Therefore you cannot live in any property that we finance.
Will Investmark run my credit?
We will not run your credit without your approval first. You may provide us with a credit report or your score through our secure online application process. If your intention is to keep the property as a rental, we will need to get an approval letter from your lender doing your permanent financing. If you do not have a lender for permanent financing, we can refer you to one that fits your profile.
What are the advantages of using hard money?
- Simple qualification process
- Fast Closing
- Allows for multiple deals
- Leverages your money almost 3 to 1 verses conventional or bank financing
Does Investmark offer 100% financing?
Under certain circumstances we can offer 100% financing and even roll your closing costs into the loan. These are typically loans where the purchase price is less than our maximum LTV, minus the repairs.
Does Investmark charge interest on the Note amount or the amount currently borrowed?
Where some lenders charge interest on the total Note amount, we do not. We only charge interest on money that is borrowed. Your Note amount is the total amount we are going to loan you (Example - $100,000 loan amount in a Promissory Note). You may have $20,000 in repairs that are being escrowed by us and technically, not borrowed yet. We do not charge interest on this $20,000 until it is borrowed. In this example you would only pay interest on $80,000, until the remainder is borrowed.
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