Hard Money Lenders Orlando: What You Need to Know
Considering financing for your next real estate venture in Orlando? Whether you’re planning to flip a spacious bungalow in College Park or invest in a rental property near Lake Eola, hard money lenders in Orlando provide the quick and flexible funding you need. Hard money loans are ideal for those grappling with tight deadlines, limited initial capital, or credit issues.
In this article, we’ll cover the basics of hard money lending in Orlando, look at its various uses, and explain the costs involved. If you’re a homeowner wanting to buy a new home before selling your current one, we’ll also explore ways to access your home’s equity. By the end, you’ll have a solid understanding of hard money loans and whether they might be a good fit for your real estate needs.
Editor’s note: This post is for educational purposes and is not intended to be construed as financial advice. HomeLight always encourages you to consult your own advisor.
What is a hard money lender?
A hard money lender is a private individual or company that provides short-term, real estate-secured loans. Unlike traditional banks, these lenders focus more on the property’s value rather than the borrower’s credit history. This makes them a popular choice among house flippers and those purchasing rental properties who need quick funding and flexible terms.
Hard money lenders determine loan amounts based on the after-repair value (ARV), which is the estimated value of a property after renovations are complete. They typically lend a percentage of this ARV to ensure the investment’s security and potential profitability.
Interest rates on hard money loans are higher, often ranging from 8% to 15%, with repayment periods between 6 to 24 months. Additional costs include origination fees, closing costs, and points. If a borrower defaults on a secured loan, the lender can repossess the collateral to recoup their losses.
How does a hard money loan work?
If you’re a real estate investor in Orlando seeking a fast and flexible financing option, hard money loans might be the solution you need. Here’s a quick breakdown of how they work:
