Honest Answers to your Texas hard money questions.

If you’re thinking about a Texas hard money loan, you undoubtedly have questions. Listed below are five quick questions five honest answers to help you understand a little bit more about Texas hard money.

Five Texas hard money questions and answers

1. What is the interest rate on a Texas hard money loan?

This question depends on the lender. No two lenders are alike and will base their interest rates on a variety of factors. However, most interest rates on hard money loans will range from 10% to 18%.

2. What Loan-to-Value are lenders seeking?

Texas hard money lenders, again, will base this number based on quite a few factors. Most of the time, the LTV will be about 70% of the after-repaired value. However, this number can range anywhere from 65% to 80%.

3. What are the costs of Texas hard money loans?

All hard money loans are going to require a Title policy, insurance, and appraisal. These services do cost money--even up to a couple thousand dollars. Often times though, this will only cost a few hundred dollars.

4. Does my credit matter?

Yes and no. Your eligibility is not determined on credit, so having bad credit doesn’t hurt you too much. However, if you have decent credit, it can establish your credibility and ensure the lender of your ability to repay. However, the loan is based on the value of the property in the end. Many people seek hard money loans mainly because of their poor credit and inability to receive a lower-interest rate loan from the bank.

5. Do I have to put money down?

Yes, most of the time. Lenders want to feel confident in their investment, so they need to see that you have enough resources to cover the costs of the loan. Expect to pay a little bit out of pocket until the project is completed.