How to figure mo pmt on HML?

Financing, Hard Money Lenders, Private Money
1

Hi All!
Just a quick question, I am trying to figure out how to calculate what the monthly payment would be on a hard money loan.
Basically the numbers are:
$100,000 loan
15.99% interest
5 year term

The loan would probably be more like 165k, and when I worked with this lender before, the loan I got through him was considered a 5 year balloon loan. Not sure if this would be as well?

I don’t want to approach him again until I get a ballpark of what exactly I am asking him for and if I can make the numbers work! Also, there is something about 5-6 points??? Not sure if that is needed to calculate the monthly pmt.
Thanks for your help! :help

2

Your HML payment would be $2431.27… this includes Principal and Interest.

Good Luck…

Mitch

3

why would you want to carry for 5 years??

4

You don’t really have enough information yet.

Is your loan

  • interest only, or,
  • amortizing

If interest only, then the monthly payment on a $100K loan will be $1332.50 with the full $100K balance due at the end of the loan term.

If amortizing, will this one have a balloon

  • If no, then your monthly loan payment will be $2431.27 over five years
  • if yes, what is the amortization period for the loan.

A point is 1% of the loan amount. Points are an up front fee paid at settlement and are in addition to your monthly and balloon payments.

5

We also need to know how many years the loan payment will be based on.
Is it a 30 year loan interest only with a 5 yr ballon payment? Can be a 15yr loan…All factor into the payment.

As for points, that is paid on front end, unless lender will let you roll points into loan which generally does not happen.

6

You may also have the option of splitting the points up, that is, maybe paying 2 on the front end and 3 on the back, or some combination thereof. I know of at least one major national HML that will do this.

7

Wow, thank you all for being so quick to help! :biggrin

Yes, the payments would be interest only, but I still have to ask about the details of the time frame…

8

If the loan is interest only, a six month loan, a five year loan, and a thirty year loan all have the same monthly payment. Interest only loan payments are determined by the amount borrowed, not the length of the loan term. Since the loan is interest only, there is no amortization period to factor into the calculations.