1. What is a Hard Money Loan?

A hard money loan is a type of short-term financing secured by real property, typically used by real estate investors. These loans are funded by private investors or companies and are based primarily on the property's value rather than the borrower's creditworthiness.

2. How Does the Calculator Work?

The calculator uses the hard money loan formula:

Where:

• \( Principal \) — Original loan amount
• \( Rate \) — Annual interest rate (as decimal)
• \( Term \) — Loan duration in years
• \( Fees \) — Additional loan fees

Explanation: The formula calculates simple interest on the principal amount and adds any additional fees to determine the total repayment amount.

3. Understanding Loan Costs

Details: Hard money loans typically have higher interest rates than traditional loans but offer faster approval and more flexible terms. The total cost includes both interest payments and any origination or processing fees.

4. Using the Calculator

Tips: Enter the principal loan amount, annual interest rate (as decimal), loan term in years, and any additional fees. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's typical interest for hard money loans in Ohio?
A: Rates typically range from 8% to 15% (0.08 to 0.15 decimal) depending on the lender and property.

Q2: What fees are usually included?
A: Common fees include origination (2-5 points), processing, underwriting, and closing costs.

Q3: How long are hard money loan terms?
A: Typically 6 months to 3 years, often with balloon payments at term end.

Q4: Are these loans amortized?
A: Most hard money loans are interest-only with principal due at term end.

Q5: What's the typical loan-to-value ratio?
A: Ohio hard money lenders typically offer 60-75% of the property's ARV (after repair value).