Some people are surprised to discover the level of fluctuation associated with hard money loan interest rates. In contrast to residential mortgage interest rates (which are relatively stable and generally adhered to by banks and credit unions), the interest rates for hard money loans have a level of variability and are generally not accessible to the public in an online database. Hence, it is in your best interest to do some legwork to determine whether the proposed interest rate for a hard money loan in Los Angeles is acceptable for your venture. Some of the key factors that will impact the interest rate for your hard money loan include:
- Property loan-to-value (LTV) ratio –The LTV ratio is a big factor in assessing the interest rate for your hard money loan because the LTV ratio provides an indication on your risk profile. In many instances, a hard money applicant who is assigned a high LTV ratio generally has less “skin in the game” and, as a result, there will be a higher interest rate on the hard money loan.
- Current Demand for Hard Money Loans– It is important to understand thatthe vast majority of hard money lenders in Los Angeles are small business owners and entrepreneurs. As a result, the availability of a private loans will be impacted by the number of hard money lenders in and around a particular geographic area. So, for example, you are more likely to get access to a private loan in Los Angeles, California as opposed to a small town in, let’s say, North Dakota.
- Your Timeline for Obtaining and Utilizing Loan Funds– The sooner a hard money applicant needs funds, the higher the interest rate will be. This is because the limited time a lender has to analyze an applicant, the higher the risk profile (i.e. the aforementioned LTV ratio). This often leads to a loan offer with a higher interest rate.
While these three factors are a big impacton the interest rate you may wind up paying for ahard money loan, there are a myriad of other factors that can impact the interest rate for any particular hard money loan.
Here is the takeaway – in contrast to conventional mortgage interest rates that have predictable patterns, the reality is that hard money interest rates are assessed on aloan-by-loan basis.
Take Action Today by Contacting PB Financial Group
If you are looking to apply for a hard money loan in Los Angeles and are seeking a trusted and reputable lender in Los Angeles, contact PB Financial Group Corporation.
PB Financial Group is a premier direct hard money, private money and bridge lender, who has been providing quick funding since 2006 and have funded over 2300 hard money/private money loans. Our objective is to work to satisfy your financing needs on important real estate projects throughout California in an efficient and effective manner.To schedule a consultation or for further information please contact PB Financial Group at 877.700.37073 or visit www.CalHardMoney.com to learn more.
PB Financial NMLS #357614/DRE #01522495