Terms to expect from private lending?

Question

Does anyone have a good feel for the typical terms and interest rates that someone with great credit (750-799 credit scores) can get if going through a hard money lender or private lender?

Specifically, what interest rates are typically available if LTV is above 80%? I'm targeting 90% on some prospective deals. I'd like to pay just a 10% downpayment.

I'm prequalified right now through a bank with 20% downpayment at a 4.65% interest rate.

Andy Collins · Answer

@Mark Manson  I don't mean this to be taken wrong, but all sorts of red flags went up when I saw those rates/terms.   You have to think, why would someone loan money with terms 2% below conforming mortgage rates?

Those rates are well below the yield on government bonds of the same duration,,,that just doesn't make sense

andy

Chris Martin · Answer

@Mark Manson  have you secured a loan with those rates? All I see are posts with that URL being flagged. Please post your borrowing experience with this firm/lender. In what way are you affiliated with this group?

Matthew Trotter · Answer

Thanks John. That is what I'm afraid of. I can easily get a bank loan with a low interest rate, but it's hard finding a lender who will do 90% LTV.

John D. · Answer

Unlikely you will find a private lender at those LTVs.  Even at lower LTVs (typically 70% max), you'll be paying 9%+, typically more like 12%.  Your credit matters much less to hard money lender, as opposed to a more standard bank loan.

Likely the only way to get a private lender up to 90% on LTV is to secure the loan to other assets, so the "V" in LTV is based on not just the subject property, but the subject property and something else of substantial value (like another property perhaps).