Question 1

Do I need a good credit score to get a hard money loan?

Accepted Answer

At Oak Tree Capital, your credit score is not the primary factor in qualifying for a hard money loan. Unlike conventional lenders who place significant emphasis on credit scores, we focus more on the value and equity of the property being used as collateral. Our hard money loans are designed to be flexible and accessible, catering to investors and borrowers who may have difficulty securing traditional financing due to credit history issues. Whether you're looking to invest in real estate, undertake a renovation project, or need quick financing for any other reason, Oak Tree Capital is here to tailor solutions that meet your needs. This approach aligns with our mission to provide diverse loan products that cater to various financial situations, including Private Money and Non-QM Loans, as well as Conventional and FHA loan products.

Question 2

Can I afford a hard money loan from Oak Tree Capital?

Accepted Answer

A: Affording a hard money loan from Oak Tree Capital involves several considerations to ensure it aligns with your financial situation and investment goals. Hard money loans are typically short-term and come with higher interest rates compared to conventional loans due to their quicker approval process and lenient credit requirements.   To determine if you can afford a hard money loan, start by evaluating the following factors:  1. Loan Terms and Interest Rates: Oak Tree Capital offers competitive rates for hard money loans, but these are generally higher than traditional mortgages. Understanding the interest rate and the total repayment amount over the loan term is crucial.  
2. Down Payment and Equity: These loans usually require a significant down payment or equity in the property. Ensure that you can meet the down payment requirements without straining your finances.  
3. Repayment Plan: Hard money loans are often short-term, ranging from one to three years. You need to have a clear exit strategy for repaying the loan, such as selling the property, refinancing, or utilizing the income generated from the investment. 
4. Fees and Closing Costs: Factor in additional costs associated with hard money loans, including origination fees, closing costs, and potential penalties for prepayment or late payments. 
5. Investment Return: Consider the potential return on your investment. A hard money loan is typically used for real estate investments where you expect a high return. Ensure that the projected profit justifies the cost of the loan.  At Oak Tree Capital, our team of experts can help you navigate through these considerations and assess your specific financial situation. We offer personalized consultations to determine if a hard money loan is the right fit for you, given your unique circumstances.  By carefully evaluating these factors and consulting with our specialists, you can make an informed decision about whether a hard money loan from Oak Tree Capital is affordable and beneficial for your investment objectives.

Question 3

Are Hard Money Lenders and Private Money Lenders the Same Thing?

Accepted Answer

At Oak Tree Capital, we get asked all the time about the differences between hard money lenders and private money lenders. While the terms are sometimes mixed up, there are a few important differences. Hard money lenders are usually companies that offer short-term loans backed by real estate, often used by investors for property flips or quick investments. These loans are generally based on the property's value rather than the borrower's credit score.  On the flip side, private money lenders can be individuals or businesses offering loans that are also short-term and secured by real estate. The main difference is in flexibility and where the money comes from; private money lenders might be more flexible with their terms and often tailor their financing options more personally compared to hard money lenders, who function more like traditional lenders with set policies.  At Oak Tree Capital, we're all about private money and non-QM (non-qualified mortgage) loans, offering personalized and flexible loan options to suit different investment needs. We also have Conventional and FHA loan products, making us a versatile option for various mortgage needs. So, whether you're after quick financing for a property investment or a more traditional loan product, Oak Tree Capital has your back.

Question 4

What is the usual term length of a Hard Money Loan (HML) offered by Oak Tree Capital?

Accepted Answer

At Oak Tree Capital, the usual term length of a Hard Money Loan (HML) is usually between 12 to 36 months. These short-term loans are great for quickly getting some cash to investors and property owners who need to close deals fast, renovate, or jump on other time-sensitive real estate opportunities. While our standard terms are 1 to 3 years, we know everyone’s situation is different, so we can work with you to customize the loan term based on what you need and your investment strategy. As a direct lender and broker specializing in private money and Non-QM loans, we also offer some flexibility in structuring terms to better match your financial goals.

Question 5

How many points and how much interest are charged on loans provided by Oak Tree Capital?

Accepted Answer

At Oak Tree Capital, the points and interest rates on our mortgage products vary based on the type of loan and the individual borrower's financial profile. For our private money and Non-QM loans, points typically range from 1 to 4 percent of the loan amount, and interest rates are usually higher than conventional loans due to the increased risk associated with these products. Conventional and FHA loans generally have lower points and interest rates, reflecting their compliance with agency guidelines and more stringent borrower qualification standards. We encourage prospective borrowers to contact our loan officers for a personalized quote, as factors such as credit score, loan-to-value ratio, and property type will affect the final terms of the loan. Our team at Oak Tree Capital is committed to providing competitive rates and transparent information to help you make the best financial decision.

Question 6

How long does it take for a hard money loan to close with Oak Tree Capital?

Accepted Answer

At Oak Tree Capital, we strive to provide a swift and efficient closing process for hard money loans (HML). Typically, it takes anywhere from 7 to 15 business days to close a hard money loan, contingent upon the complexity of the transaction and the timeliness of the required documentation. The more complex the loan the longer it takes to close. Our experienced team works diligently to expedite the process, ensuring we meet your financing needs as quickly as possible. By streamlining our procedures and offering personalized support, we aim to make the lending experience seamless and stress-free.

Question 7

Is an LLC Needed for a Hard Money Loan (HML) from Oak Tree Capital?

Accepted Answer

No, an LLC is not strictly needed to secure a Hard Money Loan (HML) from Oak Tree Capital. While many investors prefer to use an LLC for liability protection and potential tax benefits, it is not a requirement. At Oak Tree Capital, we cater to a variety of borrowers, including individuals, trusts, and corporations. Our goal is to provide flexible, tailored financing solutions to meet your specific needs. Whether you are an individual investor or a business entity, we can work with you to find the best loan product. If you are unsure about your business structure, our experienced team can offer guidance to help you make an informed decision.