Types of Private Money Loans for Real Estate Investors

Types of Private Money Loans for Real Estate Investors

Conventional real estate loans have many restrictions with the type of investment you do on a particular property you are interested. Most conventional lenders require you to apply mortgage loan for a ready to acquire and move-in property. Apart from owning a property, there are other purposes for which you would need a loan. E.g., if you want to buy a property, renovate or fix it within a year and then sell or rent it. This is called the “Fix-and-flip” loan. 99% of the banks won’t provide fix-and-flip loans. Remaining 1% even if they give, it is not a good decision to get locked in a 10- or 20-year loan repayment term required by the banks.

Private or hard money lenders help borrowers to apply for a variety of loan purposes as listed below.

Residential Loan:

This is the standard loan type most borrowers apply for. A residential loan or home loan is used to purchase a residential property such as a single-family house, condos, townhomes, etc. The loan-to-value ratio for a home loan can be even 100% if applied through the VA (Veteran Affairs) program or the USDA (The United States Department of Agriculture) program. With Federal Housing Administration loan programs, the LRV can be 95% and above. 

With several branches all over the USA, BridgeWell Capital extends its help to real estate investments on a multi-family property of more than 5 individual residential units.

Commercial Loan:

A commercial real estate loan is offered to non-residential properties that are meant for business such as office premises, shopping malls, theatres, hotels, etc. The loan-to-value ratio for a commercial property can reach up to 80%. VA, USDA or FHA are not applicable with commercial loans. Generally, a real estate investor may be expected to pay a down payment of 10% to 35% for this property type. On average, investors can purchase for a value of $1 Million with banks and above $5 Million with other lenders.

BridgeWell Capital is the top rated hard money loans Burlington, NC lender. We provide commercial real estate loans for office buildings, retail or industrial property. Submit an online request form or contact us by phone to get all your questions answered within a short time frame.

Rental Investment Loan:

A rental loan is used when a real estate investor wishes to apply mortgage for a property that will be rented out for additional income or profit. Compared to common home loans, these types of loans have higher interest rates and require a larger down payment.

At BridgeWell Capital, we give the best loan rates starting at 5.75% APR. You can use this loan for a purchase or refinancing purpose.

Rental Investment Loan:

A rental loan is used when a real estate investor wishes to apply mortgage for a property that will be rented out for additional income or profit. Compared to common home loans, these types of loans have higher interest rates and require a larger down payment.

At BridgeWell Capital, we give the best loan rates starting at 5.75% APR. You can use this loan for a purchase or refinancing purpose.

Fix-and-Flip and Fix-and-Rent Loans:

The fix-and-flip loan is a type with which the investors lock a property, purchase and renovate it and then sell it to obtain a profit. In the case of fix-and-rent, the real estate investor will buy a property, fix and then rent it out for an extra income. Fix-to-flip loans are short term loans in which a borrower invests in property and sell it as early as possible without holding it for a long time.

The best loan rates starting at 5.95% APR can be availed with the help of the top rated hard money loans Burlington, NC lender “BridgeWell Capital”. There is no penalty or hidden costs for pre-payment.

Cash Out Refinance:

Unlike a home equity loan, where the equity earned from your current mortgage is used to obtain a second mortgage, in Cash out refinance, you can replace your existing mortgage with a new one and get a cash out by utilizing certain percentage of the equity gained. In this type of loan, you may not get a 100% LRV as you are already paying of your existing mortgage with cash out. Home equity loans have higher interest rates because these are second loans whereas cash out refinance has lesser interest rates as they close your existing first loan and open a new one which is still considered as first loan and will be given first preference for pre-closure.

BridgeWell Capital offers a cash out refinance loan amount starting from $100K.

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