Hard Money Loan Questions

[Nancy Lucca]

So once u get a hard money loan and it gets funded, how soon do you have to start making payments? What if your flip takes you 3-6 months? How do people typically make the monthly payments while the flip is being renovated? Thanks everyone 

[Ian Hannon]

Hi Nancy-the most common scenario is you would have monthly interest-only payments starting the month after closing. Something to consider is whether or not the lender charges interest on the whole loan amount (including construction budget) from day one or if they prorate the interest based on when you draw the funds. I would also note that most lenders have 12 month terms, so it's important to know what your rate/situation would be if you were to go over 12 months for whatever reason. Good luck and let me know if I can help with any other questions!