HML/Private Money Questions for 2018 .............
I'm leaning towards doing a HML ( will be my first )
I have read and understand the way in which HMLs are constructed and how they work in a general sense , but given t's now 2018 and since the last time I really considered using one , was 2 years ago, I'm not sure if the rules/regulations/Interest and Points have changed much
Scenario:
The ARV on this property should come in at $130,000 given recent comparables
Repairs/Renovation costs ( Materials Only ) ........ $20,000
Assuming a 6 month HML at 15% Interest and 4 Points ( I'm using both of these on the higher ends ) ........... the total costs for the HML loan = $10,000 ( averaged out ) , and a LTV of 70%
So $91,000 is what I have to work with
My Questions please are:
1. Is 70% LTV what most HML lenders use ?
2. 6 month length of the Loan to complete the Renovations and Repairs ?
3. Once the Renovations are completed , do you just Refinance into a Conventional ( 80% LTV loan ) ?
4. Is there a " Penalty " if you complete the Renovations before 6 months and want to Refinance in say 4 Months vs 6 months ?
5. What are the Standard Points ......... 2 ? 3 ? 4 ?
6. What about Interest Rates .......... 10% ? 12% ? 15% ?
7. Will they allow you to do the Repairs yourself, so long as you can provide proof , that you know how to ( Myself and my Father , both have 45 years+ between us )
8. Do they do a " Draw " as to how they give out the money for the Renovation costs ?
9. Would I have to put up any Money Up Front , to get and qualify for the HML loan ............. or do they mainly loan , based soley on the Deal itself ?
10. If the Property currently has a Lien on it , will they still loan on it , and just pay the Lien off , as soon as we close on the deal ?
11. How do they come up with an amount that they will loan on the Property BEFORE the work has even begun on the property , given that the property is currently Distressed and needs a full Renovation on it ?
Thanks so much for the help , i really appreciate all of the help and replies