Hard money rehab loans in New Jersey refers to financial institutions in the state of New Jersey which have specialized in the provision of real estate backed loans, most of these are made these days by Private Lenders. This means that these are funded by individuals or local companies whom offer funds to borrowers secured by the completed value of property. The majority of these institutions offer borrowers with 60-65% after repair value hard money rehab loan financing. Some of the hard money rehab loans in New Jersey providers are known to operate on a nationwide level.
Typically the interest rate on the loan is higher than the conventional loans offered for both commercial and residential property funding. The higher interest rate on the loan is charged because of the higher risk that the lender has to bear. The lenders’ goal is to help investors in real estate to quickly and efficiently finance their investments. In New Jersey the repayment period is typically one year. However if you intend to lower the amount of money that you will repay then working with an even shorter repayment period is recommended.
Hard money rehab loans in New Jersey are only provided by some lenders that lend on the completed or ARV (after repair value) . Some only lend to non owner occupied real estate projects, thus you need to find a lender who can work with you.
The process to get a loan involves four main steps:
Underwriting – This is the first step which involves assessing the borrower’s loan request. If the borrower meets the underwriting requirements he is asked to fill in a loan application form.
Preparation of Documents – Once the loan terms are agreed upon the agreements are prepared and forwarded to the borrower and the appraisal is ordered.
Processing – This step is entirely undertaken by the lender, working together with the title company, realtor, insurance agent, escrow agent and appraiser.
Closing – All the documents in the transaction are signed by all parties and the money is then transferred to the borrower directly or escrow agent or the seller of the house.