Hello to eveyone, I have some questions for the hard money lenders in the forum. What is the lowest LTV hard money lenders are willing to provide on a distressed property. Are lower LTV’s subject to higher interest rates?
I’m not sure I exactly understand your question.
There really is no lowest ltv. There are usually minimum loan amounts.
Lower ltvs are better for the lender. Less risk. Some may even give you better terms, definitely not higher.
Thanks for the response, Investment Loans. The intent of my question was to determine the minimum range that an Hard money lender would be willing to loan on a property based on the after repair value. I gather from your response that there is no such minimum.
For example: If the investor finds a really super deal on a distressed property, a hard money lender will not have a problem providing lower LTV’s on a property (30%, 35,% or 40% on a property’s after repair value.
LTV should be fine as long as the minimum loan amount is met. Usually that’s around $40k - $50k.
Remember, that if the lender is basing the loan off of the arv, then funds for fixing up have to be put into an escrow account.
If you’re not wanting funds for the rehab then usually the lender will only do about 65% of the current as-is value.
Investment Loans, I did not know that if an investor does not require funds for the rehab, the lender will only do about 65% of the current as-is value. Thanks again.
Being a hard money lender it is 50% LTV up to 80% LTV.
Industry standard is 65 %to 77%
I appreciate you providing the percentages Johnny Q. Thanks
this is good information, I to didn’t know they only did 50% if you don’t need repairs done.