One of the most difficult parts about completing a hard money construction completion loan is obtaining the lender’s title insurance in the form of an ALTA 125% extended policy. This insures the lender against any future mechanic’s liens on title. Title insurance companies underwrite the risk of the borrower’s financial strength as much as the property to make sure the borrower has the ability to pay off potential liens if they arise.
In this situation, where the property was partially demolished yet in a prime location, borrower strength, and less than 50% Loan-to-Value made this is a quality loan. The loan was approved quickly both by the title company and the hard money lender.
Hard Money Construction Completion Loan Terms:
- $700,000 Loan Amount
- 12-Month Term
- No Prepayment Penalty