Private money loans are backed by a private investor or group of investors. The loan is collateralized with real estate, and the terms of the loan are negotiated between you and the lender. Private money lenders may require you to pay points on loan, which is paid upfront. You will also have to pay closing costs, including title search, escrow, and appraisal fees.
All loan programs are intended for business or investment purposes only unless otherwise specified.
Private money loans can be a great way to get funding quickly without going through a bank or other government entity. However, they are not without their drawbacks:
You have no guarantee that you will be able to sell your property at any future time (at least not for its current value). If you cannot sell and repay the loan to repay your lender, then your lender may take over ownership of your property and foreclose on it (if allowed by law).
3–36 months (interest-only options available)
Up to 70–85% ARV
Typically 1–4 points
Standard third-party fees apply
Typically range from 8.99% – 16.99% depending on the loan scenario
All terms vary based on borrower qualifications, property type, and market conditions
Rates, terms, and fees vary based on borrower qualifications, property type, and market conditions. Loan terms may include interest-only payments, origination fees, closing costs, and third-party fees. Business-purpose loans only.
