interest rates in 2019

Interest rates for hard money loans are often a point of confusion and speculation. If you’re looking for probate funding, you probably have a lot of questions about the status of interest rates in 2019. Here’s a quick guide to what interest rates you can expect from hard money lenders this year.

Competition Impacts Interest Rates

Of course, it is vital to remember that interest rates can vary widely. Not only does each lender provide different rates, but the region can impact them as well. For example, hard money lenders California tend to have more affordable rates than other states. This is mostly due to the fact that California is home to a large number of hard money lenders. The competitive market leads to lower prices. This is going to continue to be a factor in 2019 and beyond.

More Risk

Even in competitive markets, hard money lenders tend to charge higher interest rates than conventional loans from banks or credit unions. This trend is continuing in 2019. The core reason for this is because probate funding firms take on more risk than other institutions. You can expect 2019 interest rates to be between 7% to 15%, depending on the perceived risk and specific lender.

Loan-to-Value (LTV) Ratios and Rehab Costs

Another factor that impacts interest rates is the LTV ratio. Most lenders offer up to 65% on the property’s current value. Some lenders may also provide loans according to the after repair value. In certain circumstances, a lender may even finance rehab expenses and lend a significant percentage of the ARV. Due to the fact that this involves more risk, it may result in higher interest rates.

The interest rates may seem intimidating at first, but the advantages of funding a loan quickly and getting financing can outweigh the cost. Hopefully, this post arms you with sufficient confidence and knowledge to pursue a hard money loan to cover your real estate deals.