First of all, you need to assess your financial needs in order to see your project completed. Then, you need to appraise the property that will back the loan and make sure its value is enough. Do not forget to include a thorough analysis of the costs and your projections for the future, for how you will reimburse the loan. The more information you give and the more solid your application is, the better your chances to obtain the money are.
Top 5 Aspects to Pay Attention to When Working with the Hard Money Lenders in Baltimore MD for Rehabs
- Loan Limits – Compared to most other states, Maryland does not seem to have very high limits set; they can reach $400,000 for a single, but will never be higher than $1,000,000 for a four-plex. Even so, never borrow more money than you really need. It would be a pity to pay interest for money you are not going to use.
- Interest rates – They depend on the lender’s policy and on how solid your application is, but always look for the lowest rates, because, in the end, they determine the overall costs of the loan and you should not pay more than you have to.
- Repayment terms – The hard money lenders in Baltimore MD for rehabs rarely accept terms longer than 6 months, so make sure you can finish the works and have the property on the market on time or look for lenders that will agree with a 9 months or 1 year repayment terms.
Value of the loan – You are pretty lucky, as the loan to value ratio in Baltimore reaches 80%, but, just to be sure, make sure the loan you ask for does not exceed 60-70 % of the value of the property you use as collateral.
- Early repayment – You may be lucky and complete your project earlier. Why not repay the loan and save some money on interest? Pay attention to the early repayment fees applied by the hard money lenders in Baltimore MD for rehabs.