Bridge Loans in ,
There are 50 lenders offering bridge loans in Pennsville, NJ. The median loan amount in this city is $283,125. Interest rates on hard money loans issued to Pennsville investors average 11.5%. 15 months is the median length for loans offered in the city. The average hard money loan issued in this city carries a 2.8 point origination fee. The typical loan-to-value offered for loans in Pennsville is 73%.
Loan Example 1
Cory takes a private money bridge loan from Assurance Finance in order to remodel a townhouse to flip in Pennsville, NJ. The price of the property is $220,000. The terms of the deal include a 80% loan to value (LTV), so he must contribute 20% of the price as cash to closing, making the principle loan amount $176,000. The loan is interest-only, with monthly payments, and is for 12 months at 11% interest with 2 points paid when the deal closes.
On top of the $3,520 origination fee, Cory will also have to fund $44,000 of the purchase with his own funds, or 20% of the sales price. After the loan closes, he will need to pay Assurance Finance $1,613 in monthly interest payments, or 11% multiplied by $176,000 divided by 12 months in a year. Cory 's intention is to complete the project within the 12 months and re-sell it for $308,000. If he succeeds he will collect a profit of $65,120 ($308,000 sales price - $176,000 principle - $44,000 cash at closing - $3,520 origination fee - $19,360 in interest.
Loan Example 2
Sheryl is a real estate investor in Pennsville, NJ. She locates an older property for a remodeling project and takes out a private money bridge loan from Big City Finance Company with the following terms:
a) A $270,000 sales price, b) a 75% loan-to-value (LTV), c) a 18 month term, d) a 12% interest rate, and e) a 5% origination fee.
If Sheryl achieves her goal of a $351,000 sales price, the outcome of the deal will be as follows:
$351,000 sales price
- $202,500 principle on note (75% LTV)
- $67,500 cash paid at closing (25% on 75% LTV)
- $10,125 origination fee (5% of the $202,500 principle amount)
- $36,450 interest payments (18 months x 12% interest)
= $34,425 total profit (doesn't include taxes or renovation costs)