Bridge Loans in ,
Westford, MA has 50 hard money bridge lenders offering loans within the city. The mean loan made to borrowers is approximately $359,688. The mean interest rate for private loans in Westford is 10.1%. 16 months is the mean term for loans issued in the city. A typical hard money loan issued in the city carries a 3.0 percent origination fee. 77% is the typical loan to value offered for for loans in Westford.
Loan Example 1
Nora takes a bridge loan from River View Lending Company in order to remodel a condo to resale in Westford, MA. The list price of the property is $250,000. As the lender agrees to a 75% loan to value, Nora will need to put 25% down so the total amount of the loan will be $187,500. The parameters of the note also include a four percent origination fee which will be paid at the closing and a 6 month, interest only note with a 12% rate of interest.
Nora must fund a total of $32,400 up front to cover the $62,500 down payment plus the $7,500 origination fee. The monthly interest only payments will then total $1,875 to River View Lending Company . Assuming Nora sells the remodeled project for $325,000 at the end of the 6 month term, her gross profit (not accounting for rehab costs) would be $56,250. This is calculated by taking the purchase price ($325,000) and subtracting the principle ($187,500), the origination cost ($7,500), the funds she contributed to closing ($62,500), and the total interest expenses ($11,250).
Loan Example 2
Rafael takes out a hard money bridge loan from BCC Lending Company in order to remodel a property to flip in Westford, MA. The deal has the following terms:
$280,000 sales price
75% loan-to-value (LTV)
12 month term
11% rate of interest
5% origination fee
Based on a $378,000 sales price after the 12 month term, the outcome for the project would look like the following:
$378,000 sales price
- $210,000 note principle (75% LTV)
- $70,000 cash paid at closing (25% on 75% LTV)
- $10,500 origination fee (5% of the $210,000 principle)
- $23,100 total interest paid (12 months x 11% interest)
= $64,400 total profit (doesn't include taxes or rehab costs)