Hard Money Lenders Orlando: What You Need to Know
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Kelsey Morrison Former HomeLight EditorClose
Kelsey Morrison Former HomeLight EditorKelsey Morrison worked as an editor for HomeLight's Resource Centers. She has seven years of editorial experience in the real estate and lifestyle spaces. She previously worked as a commerce editor for World of Good Brands (eHow.com and Cuteness.com) and as an associate editor for Livabl.com. Kelsey holds a bachelor’s degree in Journalism from Concordia University in Montreal, Quebec, and lives in a small mountain town in Southern California.
Considering financing for your next real estate venture in Orlando? Whether you’re planning to flip a spacious bungalow in College Park or invest in a rental property near Lake Eola, hard money lenders in Orlando provide the quick and flexible funding you need. Hard money loans are ideal for those grappling with tight deadlines, limited initial capital, or credit issues.
In this article, we’ll cover the basics of hard money lending in Orlando, look at its various uses, and explain the costs involved. If you’re a homeowner wanting to buy a new home before selling your current one, we’ll also explore ways to access your home’s equity. By the end, you’ll have a solid understanding of hard money loans and whether they might be a good fit for your real estate needs.
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Through our Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency.
Editor’s note: This post is for educational purposes and is not intended to be construed as financial advice. HomeLight always encourages you to consult your own advisor.
What is a hard money lender?
A hard money lender is a private individual or company that provides short-term, real estate-secured loans. Unlike traditional banks, these lenders focus more on the property’s value rather than the borrower’s credit history. This makes them a popular choice among house flippers and those purchasing rental properties who need quick funding and flexible terms.
Hard money lenders determine loan amounts based on the after-repair value (ARV), which is the estimated value of a property after renovations are complete. They typically lend a percentage of this ARV to ensure the investment’s security and potential profitability.
Interest rates on hard money loans are higher, often ranging from 8% to 15%, with repayment periods between 6 to 24 months. Additional costs include origination fees, closing costs, and points. If a borrower defaults on a secured loan, the lender can repossess the collateral to recoup their losses.
How does a hard money loan work?
If you’re a real estate investor in Orlando seeking a fast and flexible financing option, hard money loans might be the solution you need. Here’s a quick breakdown of how they work:
- Short-term loan: These loans typically have a repayment period of 6–24 months, offering a shorter commitment compared to 15- or 30-year mortgages.
- Faster funding option: Hard money loans can be approved within days, a stark contrast to the 30 to 50 days often required for traditional mortgage loans.
- Less focus on creditworthiness: Approval is less dependent on your credit score or income history, focusing more on the value of the property.
- More focus on property value: The loans are based on the loan-to-value ratio of the property being used as collateral.
- Not traditional lenders: These loans are provided by private individuals or companies, not conventional banks.
- Loan denial option: Hard money loans are often utilized by those with poor credit or those who have been denied a mortgage but possess significant home equity.
- Higher interest rates: Due to the increased risk, these loans carry higher interest rates than traditional mortgages.
- Might require larger down payments: Borrowers may need to come up with a larger down payment, sometimes up to 20%–30% of the property’s value.
- More flexibility: With fewer regulations, hard money lenders in Orlando can offer flexible credit scores and debt-to-income (DTI) criteria.
- Potential for interest-only payments: These loans might allow for interest-only or deferred payments initially, unlike traditional mortgages.
What are hard money loans used for?
Hard money loans address particular financing needs within Orlando’s real estate market. These loans are popular among investors and homeowners who need fast funding or face obstacles with traditional loans. Here’s an overview of typical uses for hard money loans:
Flipping a house: Hard money loans provide fast funding for Orlando house flippers. These loans enable flippers to quickly acquire properties, complete necessary renovations, and sell them for a profit in a short period of time.
Buying an investment rental property: Hard money loans can be an option for investors looking to buy rental properties quickly, especially those that might need repairs right away. Unlike traditional loans, hard money loans can help investors get the funding they need faster, allowing them to fix up the property and start renting it out sooner.
Purchasing commercial real estate: Commercial real estate deals can sometimes benefit from the flexibility and speed of hard money loans. This is especially true when a quick decision is needed to secure a desirable property. Traditional loan processes can have delays, and hard money loans can help investors move faster in such situations.
Borrowers who can’t qualify for traditional loans: People with considerable home equity but poor credit or other disqualifying factors may turn to hard money lenders. These loans are based on the value of the property rather than the borrower’s credit score, making them an alternative for those who cannot secure conventional financing.
Homeowners facing foreclosure: Homeowners at risk of foreclosure can use hard money loans to refinance their mortgage or buy additional time to sell their property. This provides a temporary solution to avoid foreclosure and the negative impact it can have on their credit report.
How much do hard money loans cost?
Hard money loans often come with higher costs compared to traditional loans. This reflects the increased risk they pose to lenders due to the faster turnaround times and less strict qualifying criteria. Here are some of the typical costs involved:
- Interest rates: These can range from 8% to 15%, depending on the lender’s risk assessment.
- Origination fees: Lenders may charge 1% to 5% of the total loan amount.
- Closing costs: Additional fees at closing include legal fees, appraisal fees, and administrative costs.
- Points: Lenders might charge points, a percentage of the loan amount, upfront.
Online calculators can help you estimate these costs.
Alternatives to working with hard money lenders
If you’re a homeowner in Orlando looking for alternatives to hard money loans, here are a few options you might want to consider.
Take out a second mortgage: If you have a lot of equity in your home, a home equity loan or home equity line of credit (HELOC) can provide the needed funds at a lower interest rate compared to a hard money loan.
Cash-out refinance: This option allows you to refinance your existing property, pulling out cash to finance your new investment. It often comes with lower interest rates than hard money loans.
Borrow from family or friends: A personal loan from family or friends can offer flexible repayment terms and potentially lower or no interest rates, making it a lower-cost option.
Use a government-backed loan program: Programs offered by the FHA, VA, or USDA can help buyers purchase homes with lower down payments and reduced interest rates.
Peer-to-peer loan: These loans are provided by individual investors through lending platforms, functioning similarly to hard money loans but often with different terms.
Specialized loan programs: If you already have a hard money loan and want to replace it, consider specialized loans for fixer-uppers or investment property refinancing.
Request a seller financing option: On occasion, sellers may agree to finance the purchase themselves, which can result in lower closing costs and less stringent eligibility requirements.
How to buy before you sell
Sometimes, the perfect home hits the market when you’re not quite ready to sell your current house. Maybe it’s an updated ranch-style home in Winter Park or a modern two-bedroom condo on Lake Fairview. For Orlando homeowners wanting to buy a new home before selling their current one, HomeLight offers a seamless solution.
The Buy Before You Sell (BBYS) program allows you to utilize the equity in your existing home to make a competitive, non-contingent offer on a new property. If your home qualifies, you can get your equity unlock amount approved in 24 hours or less, with no cost or commitment required. This allows you to confidently purchase your next home and then sell your current one vacant, avoiding the inconvenience of moving twice.
Here’s how HomeLight Buy Before You Sell works:
There’s a flat fee of 2.4% of your current home’s sold price. However, the potential savings in other areas might outweigh this cost. You could save on moving expenses, temporary housing, and even the final purchase price of your new home. Plus, HomeLight’s BBYS fees are typically much lower than the interest rates on bridge loans, which currently range from 9.5% to 12%.
3 top hard money lenders in Orlando
Traditional lenders are reliable but often slow to approve loans. If you need quick funding for a real estate deal in Orlando, hard money lenders can help. Here are three top-rated options to consider:
Capital Fundings
Based in Orlando, Capital Fundings is a direct private money lender for real estate investors. They lend throughout Florida and specialize in Orange, Osceola, Seminole, Brevard, Polk, and Lake counties. The company is federally licensed with the NMLS and carries professional liability insurance. They offer fix-and-flip loans, DSCR rental loans, and 30-year rental refinance loans. Residential investment projects are typically funded in seven days, and the website advertises “great rates and terms.”
Lending clientele: Residential real estate investors
Loan criteria: Up to 80% LTV
Capital Fundings has a perfect 5-star rating on Google based on over 100 reviews. They are also accredited by the Better Business Bureau (BBB) and hold an A+ rating. Clients commend their consistent communication, efficient loan process, and fast closings. “Quick, friendly, and efficient,” wrote one reviewer. “I’ve been a title company owner for 34 years, and this is one of the easiest deals I’ve closed.”
407-203-0300
BridgeWell Capital
Founded in 2008, BridgeWell Capital is an in-house private money lender that maintains an office in Orlando. To date, they have funded loans to real estate investors totaling more than $500 million. They currently lend in 23 states, including Florida, where they primarily serve the Orlando metropolitan area, Tampa, Gainesville, Jacksonville, and Tallahassee. The company offers a variety of loan products, including commercial loans, rental loans, fix-to-flip loans, fix-to-rent loans, cash-out refinance loans, and multi-family loans. Depending on the loan type, closing can happen in as little as 10 days.
Lending clientele: Residential and commercial real estate investors
Loan criteria: Up to 75% ARV (fix-to-flip and fix-to-rent)
BridgeWell Capital has a 4.7-star rating on Google from over 100 reviews. They are also BBB-accredited with an A+ rating. Reviews highlight the company’s willingness to answer questions, provide valuable advice, and go above and beyond for their clients. “We were in an urgent situation and had less than 30 days to close,” shared a client. “BridgeWell was a quick and smooth closing from beginning to end! I have been a Realtor for over 23 years, and I can honestly say this was one of the BEST as far as communication, time of essence, and professionalism that I have ever experienced!”
866-500-4500
Hard Money Lenders IO
Hard Money Lenders IO, based in Florida, specializes in providing loans to real estate investors and entrepreneurs. They offer fast funding and flexible terms for purchasing, renovating, or constructing residential properties. Their loan programs include fix-and-flip loans, rental property loans, new construction loans, commercial loans, and bridge loans. Loan terms range from three months to six years, with interest rates typically between 10% and 15%.
Lending clientele: Real estate investors and entrepreneurs
Loan criteria: Up to 75% ARV for most loan programs
Hard Money Lenders IO boasts a 4.9-star rating on Google, with clients praising their professionalism, exceptional customer service, and transparency. “Working with Yuval and Hard Money Lenders was a smooth and easy process!” reads a recent review. “Great communication and great deliverance of a loan in less than 2 weeks!”
786-475-7691
Investing in real estate?
Hire an investor-friendly real estate agent who can help you get access to off-market properties at a discount and assess potential rental income based on market trends. HomeLight can connect you with investment property specialists at no cost.
Should I partner with a hard money lender in Orlando?
Deciding whether a hard money loan is right for you depends on your specific situation and real estate goals. Hard money loans are best suited for Orlando real estate investors who need fast access to capital for projects like flipping homes or purchasing rental properties. These loans offer quick funding and flexibility but come with higher costs and shorter repayment terms.
For homeowners looking to leverage their home’s equity, HomeLight’s Buy Before You Sell program may be a better alternative. Instead of dealing with high interest rates, you’ll pay a small flat fee and benefit from a stronger, non-contingent offer on your new home. This program can simplify your move and potentially save you money in the long run.
Consider your long-term strategy and consult with a financial advisor to make sure your decision aligns with your investment goals. If you’re looking for investor-friendly real estate agents in Orlando with access to trusted hard money lenders, let HomeLight connect you with top professionals in your area.
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