I’m commonly asked what is the typical loan term of a hard money mortgage. A typical hard money lender will provide a loan term of 3- 6 months. This short of a time period is a large risk/problem for many borrowers. For example what if an investor bought a property with the expectation that it could be leased and refinanced within 6 months. Upon purchase of the house, the investor found out that the property required substantially more work than they had anticipated which subsequently increased the rehab time. This increased rehab time further increased the amount of time before they could get a tenant. As a result of not having a tenant for a long enough period of time, a traditional lender may not be able to structure a take- out loan. The borrower in many cases is stuck and either forced to pay a large renewal fee with the current lender (if allowed at all) or find another lender and pay closing costs, lender fees, etc… all over again. The above scenario is just one example of how a short term loan (< 6 months) could be challenging for many borrowers.
Fairview quickly recognized the dilemma facing many borrowers with short term hard money loans. As a result we have created a product with a loan term of 1-3 years (and as long as five year initial term depending on the circumstances). This longer term provides borrowers substantially more flexibility than a traditional 6 month loan and can save the borrowers thousands of dollars by not having to pay renewal fees or find another lender after 6 months. Fairview is the only lender that I am aware of that can do true hard money loan terms as long as 3 years (5 depending on the circumstances). To learn more about our lending criteria please see: https://www.fairviewlending.com/loan_program.htm or fill out our simple one page hard money application: https://www.fairviewlending.com/loan_app.htm