Hard Money Loans in Chicago, Illinois
Chicago, IL has 50 hard money lenders offering loans within the city. Note amounts average around $444,524. Rates for private loans average 13.4%. The average loan made in this city has a length of 26 months. The mean loan includes a 3.5 point origination fee. Lenders typically offer a 75% loan-to-value on hard money loans in Chicago.
Loan Example 1
Clarence finds a property in the River North subdivision of Chicago, IL to remodel and resell. Since he doesn't have enough cash to purchase the $230,000 house outright, he takes out a private money loan from J & T Finance Company . Since the lender agrees to a 85% loan-to-value, Clarence will need to put 15% down so the principle amount of the loan will be $195,500. The loan is interest-only, with monthly payments, and is for 18 months at 11% interest with 3 points to be paid at closing.
Clarence will need to contribute $34,500 to the closing (15% on the 85% LTV), plus he will need to pay the $5,865 origination fee. he will then pay $1,792 monthly to J & T Finance Company . Clarence 's plan is to complete the remodel by the end of the 18 months and resell it for $287,500. If he succeeds he will collect a gross profit of $19,378 ($287,500 price - $195,500 principle amount - $34,500 down payment - $5,865 origination fee - $32,258 in total interest payments.
Loan Example 2
Harold finds a property in the Stateway Gardens neighborhood of Chicago, IL to remodel and sell. Because he does not have enough cash to buy the property outright, he takes a hard money loan from Ocean View Funding Company with the following parameters:
$160,000 sales price
85% loan to value (LTV)
18 month term
13% interest rate
2% origination fee
Harold intends to list the project at the end of the term for $192,000. If he accomplishes his goal, the final numbers would be as follows:
$192,000 sales price
- $136,000 principle on note (85% LTV)
- $24,000 cash paid at closing (15% on 85% LTV)
- $2,720 origination points (2% of the $136,000 principle)
- $26,520 total interest paid (18 months x 13% interest)
= $2,760 total profit (does not include taxes or renovation costs)