Frequently
Asked
Questions

A hard money loan is a type of loan that is secured by real property. Hard money loans are considered loans of “last resort” or short-term bridge loans. These loans are primarily used in real estate transactions, with the lender generally being individuals or companies, and not banks.

Our interest rate will depend on variables that include but are not limited to:

• the Federal Reserve Fed Funds rate
• real estate market conditions
• property location
• loan to value (LTV)
• The flipper's experience with buying, renovating, and selling homes.

Rates will typically cycle between 10% and 14%.

At least 48 hours prior to settlement, the borrower must provide proof of a fully paid, one-year Homeowner's Insurance policy with a construction rider, or a Builder's Risk Policy.

If required, a pre-approval letter is always available.

Funding Flips does not require a credit report, therefore no credit score is required. On a very rare occasion, if there is something truly unique about the transaction, a credit report may be required.

The typical flipper will contact us 7-10 days prior to settlement, but we can literally fund your loan, if necessary, on the same day you contact us. This assumes the title company is ready to go, and that you have the required property insurance.

Yes, a $795 administration fee. There are no other fees collected at settlement or at time of payoff.

Our loans are meant for property flippers, so a one-year term is our limit. A longer term will require an exception. If the exception is granted, a higher rate and/or additional points may be necessary.

Although the amount required varies by property location, market conditions, and borrower’s flipping experience, we will typically ask for a down payment of 20% of the acquisition price.

In some cases, exceptions can be made for as little as 5%-10% down.

No, there are absolutely no prepayment penalties. Borrowers can pay down principal balance or pay off the loan at any time.

Typically no, but for borrowers who have substantial flipping experience, exceptions are sometimes possible.

No, they both refer to the same type of lending.

Our interest rates are fixed for the duration of the loan term.

On a case-by-case basis, a loan term extension will be considered. If a loan term exception is approved, a two-point charge is required on the current loan balance, to be paid at the time of the extension. Also, if the Federal Reserve Fed Funds rate increased since the inception of the loan, the interest rate will adjust by the amount of the Fed Funds increase. Lastly, a principal curtailment of 5% of the loan balance may be required.

Yes, there are two points typically charged at the time of settlement. If there are unique circumstances where we have agreed to an exception, points can increase up to a total of four.

Depending on the borrower's experience of flipping, the location of the property, and the type of flood zone, Funding Flips will consider lending on these properties. If Funding Flips agrees to fund a loan in a flood zone, Flood Insurance will be required.