FAQs
The primary benefit of using hard money loans in Tampa is the immediate access to investment capital, enabling investors to quickly capitalize on time-sensitive opportunities such as real estate investments, home repairs, and foreclosure.
No, private mortgage loans are often based more on the value of the collateral (the property) than the borrower’s credit score, making them an option for individuals with poor or limited credit.
Private lending is beneficial for real estate investors, house flippers, homeowners with bad credit, and those needing quick access to capital for time-sensitive projects.
Private lending offers faster funding, easier qualification requirements, and more flexible terms compared to traditional bank loans but typically comes with higher interest rates and shorter repayment periods.
Private loans can be funded much faster than traditional loans—often within days—making them ideal for time-sensitive real estate transactions.
Private lending is generally not recommended for long-term investments due to the short repayment terms, but it can be a useful bridge until refinancing with a traditional mortgage is possible.
Payments made on private mortgage loans are typically not reported to credit bureaus unless your lender reports them, so you may need a third-party service to help build credit with your private loan.
In Florida, a license is no longer required to be a hard money lender as of March 21, 2018, when Governor Rick Scott signed House Bill 935 into law. For loans that do not exceed an 18% annual percentage rate, no consumer finance license is necessary. However, if a loan includes a mortgage against real property, a person may need to obtain a mortgage lender license under Chapter 494, Florida Statutes.
Overall, hard money lenders are typically reputable, but there are some scams to be aware of. Be sure to research the lender and do your due diligence before signing on the dotted line.
Hard money loans are secured by real property and may not impact the borrower’s credit score, depending on the lender’s reporting practices. Hard money lending does not utilize credit score as a factor when making lending decisions. The reporting practices of hard money lenders in Tampa may vary, so it is advisable to contact individual lenders to inquire about their specific practices.
It is important to note that although hard money loans may not be reported to credit bureaus, they are still secured loans backed by real property. Failure to repay the loan could result in the lender taking possession of the collateral, which could have a negative impact on the borrower’s financial situation.
Hard money loan rates are generally higher than those of conventional loans, with actual rates differing depending on the lender and the borrower’s qualifications. The average interest rate for hard money loans in Tampa can range from 6.99% to 18%, depending on the direct lender’s terms. This is slightly higher than the national average of 11.05%, with the average interest rate for hard money loans in Tampa, including bridge loans, being approximately 11.6%.
Higher interest rates for hard money loans can be attributed to the increased risk associated with these types of loans, as they are typically short-term and asset-based. However, the speed and flexibility offered by hard money loans make them an attractive option for investors and homeowners who require quick access to capital.
The credit score requirement for hard money loans can vary by lender, but it typically falls within the range of 550 to 650. Not all hard money lenders in Tampa necessitate a credit check, with many focusing more on the deal itself and the investment opportunity. It is advisable to research individual lenders to gain an understanding of their specific requirements.
In addition to credit score, Tampa hard money lenders also assess the borrower’s capacity to make a substantial down payment, their income stability, and the worth of the asset or property being used as security for the loan. It is possible to obtain a hard money loan in Tampa with a suboptimal credit rating, with multiple hard money lenders in the area specializing in providing loans to individuals with bad credit.
In most cases in purchases and refinancing we can close and fund in 7 to 14 business days of the application date.
A hard money loan, also known as a private money loan, is a short-term, asset-based loan typically utilized by real estate investors to finance investment properties. These loans are offered by private investors or companies, such as direct hard money lenders, and are commonly employed for real estate transactions, including rental property loans and bridge loans.
Real estate is typically utilized as collateral for private money loans, including real estate loans, with other hard assets like vehicles, equipment, machinery, and precious metals also accepted. Customary terms of a hard money loan include a repayment period of 12-24 months, loan amounts ranging between 70% and 80% of the appraised value of the property, and interest rates of approximately 15% per annum.
We can make loans up to a debt to income ratio of 55%. This is calculated by adding together all monthly debt and dividing the total into the monthly income amount.
Yes, home owners insurance is required for all owner occupied homes.
There are no prepayment penalties for homes that are owner occupied.
Closing costs are determined by the total amount of the loan. Typically closing cost are between 4% and 10% depending on which loan product is used.
The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply:
- Earnest Money: The deposit that is supplied when you make an offer on the house
- Down Payment: A percentage of the cost of the home that is due at settlement
- Closing Costs: Costs associated with processing paperwork to purchase or refinance a house
For most homeowners, the monthly mortgage payments include three separate parts:
- Principal: Repayment on the amount borrowed
- Interest: Payment to the lender for the amount borrowed
- Taxes & Insurance: Monthly payments are normally made into a special escrow account for items like hazard insurance and property taxes. This feature is sometimes optional, in which case the fees will be paid by you directly to the County Tax Assessor and property insurance company.
There is no simple formula to determine the type of mortgage that is best for you. This choice depends on a number of factors, including your current financial picture and how long you intend to keep your house. Associates Home Loan of Florida can help you evaluate your choices and help you make the most appropriate decision.
An index is an economic indicator that lenders use to set the interest rate for an ARM. Generally the interest rate that you pay is a combination of the index rate and a pre-specified margin. Three commonly used indices are the One-Year Treasury Bill, the Cost of Funds of the 11th District Federal Home Loan Bank (COFI), and the London InterBank Offering Rate (LIBOR).
With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest changes periodically, typically in relation to an index. While the monthly payments that you make with a fixed-rate mortgage are relatively stable, payments on an ARM loan will likely change. There are advantages and disadvantages to each type of mortgage, and the best way to select a loan product is by talking to us.
