Bridge Loans in ,
We found 50 search results for hard money bridge lenders in Farmington, CT. The average loan made to borrowers is approximately $310,000. The average interest rate for private loans in Farmington is 12.2%. 14 months is the average term for loans made in the city. The average loan includes a 2.9 point origination charge. Lenders in Farmington average a 72% loan-to-value (LTV) on their deals.
Loan Example 1
Leonard takes a private money bridge loan from Urban Investments in order to rehab a property to resale in Farmington, CT. The price of the house is $280,000. The lender agrees to issue a note with a 50% loan-to-value (LTV) so they will loan $140,000 on the house. The rate on the loan is 9% for a length of 18 months and the lender requires a one point origination fee at the closing. The interest is to be paid on a monthly basis and the principle will be paid back after the property sells.
Accordingly, the borrower will be required to contribute a $140,000 down payment plus pay a $1,400 origination fee. Once the loan closes, he will need to pay Urban Investments $1,050 in monthly interest payments, or 9% multiplied times $140,000 divided by 12 months in a year. If he sells the renovated house for $406,000 at the end of the 18 month term, his gross profit (not including rehab expenses) would be $105,700. This is calculated by taking the sales price ($406,000) and subtracting the original note amount ($140,000), the origination cost ($1,400), the funds he contributed to closing ($140,000), and the total interest payments ($18,900).
Loan Example 2
Vera finds a house in Farmington, CT to remodel and sell. Because she does not have enough cash to buy the property outright, she takes a private money bridge loan from Hometown Investment Company with the following parameters:
a) A $380,000 purchase price, b) a 50% loan-to-value (LTV), c) a 12 month term, d) a 8% interest rate, and e) a 2% origination fee.
Based on a $494,000 sales price after the 12 month term, the outcome for this project would look like this:
$494,000 sales price
- $190,000 note principle (50% LTV)
- $190,000 down payment (50% on 50% LTV)
- $3,800 origination fee (2% of the $190,000 principle amount)
- $15,200 total interest paid (12 months x 8% interest)
= $95,000 gross profit (does not include taxes or renovation costs)