WHAT IS A "HARD MONEY" OR "REHAB LOAN"?
“Hard Money” loans are private funds provided to borrowers, which are secured by the value of a property, as opposed to their creditworthiness or financial history. Hard Money loans typically have shorter terms than traditional loans, ranging from 3 to 12 months, along with higher interest rates.
WHY DO PEOPLE USE HARD MONEY?
People use Hard Money because many real estate investors need quick and flexible capital to secure a deal. Generally, banks and other institutional lenders are heavily regulated, have stringent lending requirements, and as a result, are unable to meet the needs of many investors. Typically, borrowers use Old North Capital in cases when they either do not have the time, credit, or patience to deal with a traditional bank. Hard money provides investors with an incredibly valuable tool, which ultimately gives them a distinct advantage over their competition.
DO YOU LEND ON OWNER-OCCUPIED HOMES?
No, we only provide financing for investment properties, meaning the borrower cannot live on the property at any point during the loan.
WILL YOU LOAN MONEY IN MY CORPORATE, LLC, OR TRUST NAME?
Currently, all loans are only made to corporations, trusts, or LLCs. If an individual would like to receive a loan and does not have an LLC, it is no problem. We can provide quick and easy assistance in the creation process.
DO YOU ONLY LEND IN NORTH CAROLINA?
No. We are available for North Carolina, Tennessee, Georgia, Alabama, Colorado, Texas, and Michigan properties.
WHAT IS THE MAXIMUM LOAN AMOUNT?
Old North Capital targets loans between $50,000 and $2,000,000.
HOW LONG ARE LOAN TERMS?
ARE THERE MINIMUM CREDIT REQUIREMENTS TO OBTAIN A LOAN?
No, Old North Capital lends money based on the value of the asset. Typically we do not run credit checks. Your credit score will not be used to determine whether you are qualified for a loan with Old North Capital.
WHAT ARE THE TYPICAL TERMS?
Loan terms will vary depending on the type of loan you apply for. See the LOAN TYPES & TERMS section for specific information. On our most popular Fix & Flip loan, we offer interest rates of 12.9%, with 3 points, and a $595 document fee. It is important to note that we will only charge borrowers interest on amounts that we have actually disbursed to the borrower. For example, a borrower may be approved for a $200,000 loan but will receive $75,000 over time, for construction, as it is completed. If the borrower has not yet received any portion of $75,000, then they will not be charged interest on that amount. This allows our borrowers to save substantial amounts of money on interest for construction or renovation-based projects.
WHAT IS THE DOWN PAYMENT REQUIREMENT?
Generally, you will have to put down a down payment of at least 10% depending on the loan and the property.
WHAT IS THE MAXIMUM LTV?
Old North Capital bases Loan To Value (LTV) calculations on our in-house valuation of the property. The maximum LTV in most cases is 70%.
WILL YOU LEND REHAB MONEY?
DO YOU CHARGE PRE-PAYMENT PENALTIES?
In most cases, we do not have pre-payment penalties.
HOW QUICKLY CAN YOU CLOSE?
Because we are able to underwrite all of our loans in-house, we can fund your loan in as little as 5 days if all parties are prepared.
DO YOU REQUIRE INSURANCE?
Yes. We require hazard and title insurance on each property that we lend on.
HOW DO I APPLY?