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HARD MONEY LOANS UTAH 75% LTV
Hard money loans in Utah will go up to 75% LTV while other states is 70% LTV.
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Utah is a great place for investors outside of the Salt Lake Valley. Hard Money loans & DSCR are great opportunities for your investors. If you are an MLO with no license in Utah, call me. I am happy to help your clients get a foothold in this market.
Let’s Make Your Mortgage Work For You!
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What Are Hard Money Loans? Real estate investors, residential property owners, and every borrower needing urgent funds can all leverage hard money loans since they are bridge-gap loans secured by real estate when such borrowers have exhausted other options. Here are some key features:
Collateral-Based: The most unique or distinguishing difference between hard money loans and conventional loans is that they are more collateral-based than personality-based.
Short-term: These loans usually have a term of 1 to 3 years, i.e., they are short-term loans.
Higher Interest rates: Hard money loans are also secured loans, but they carry a risk for lenders. Due to this, most hard money loans have higher interest rates than conventional loans.
Quick Funding: This type of financing is also preferred because it is generally faster than other forms of loans, making it ideal for time-sensitive projects.
How to Qualify for Hard Money Loans: Hard money loans are advanced through different requirements to conventional loans, as seen below.
Property Value: In all hard money loans, the first stage is determining the amount of collateral that the borrower is willing to bear. Most hard money lenders are comfortable with a set percentage of the overall value, which are generally the loan-to-value ratios (LTVs). For most lenders, LTVs tend to range from 60 to 80%.
Equity in the Property:
It is expected that the borrowers maintain a high amount of equity in the property. This is important since it protects the lender from the defaulting risk as the property itself has worth.
Purpose of the Loan:
There are several reasons as to why hard money loans are advanced. These include but are not limited to:
- Fixing and flipping
- Buying land
- Purchasing investments
- Needs for short-term finance.
Exit Strategy
Lenders will want to know the borrower’s plan for repaying the loan. An exit strategy must detail how the borrower plans to pay back the loan. This can mean selling the asset or refinancing it into a new loan.
Creditworthiness
Credit scores are not very relevant for hard money loans, but the lender may check the borrower’s credit report. Borrowers with a relatively higher credit score must expect better loan terms.
Experience and Track Record
In the case of real estate investors, mentionable success in investment in property will also help convince lenders to give them a green light in loan applications.
Documentation.
Basic documentation as may be applicable is this:
- Some form of proof regarding income.
- Details about the property in question.
- Any current liens or mortgages on the property
Essentially, hard money loans work best for people who require fast financing or for people who would not otherwise qualify for regular loans. Knowing the qualification criteria and a proper plan helps honest borrowers in the hard money loan field. Before taking a hard money loan, consider the expenses and risks connected with hard money.