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Updated almost 7 years ago,

User Stats

452
Posts
10
Votes
Michael Dunn
  • Olive Branch, MS
10
Votes |
452
Posts

HML/Private Money Questions for 2018 .............

Michael Dunn
  • Olive Branch, MS
Posted

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 

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