LendingHome is a hard money lender that seeks to improve access to funding for real estate investors. But how does the program work, and is it worth considering? Read on to find out.
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- What Is LendingHome?
- LendingHome Services
- The Process
- Other Things to Know
- Our Take
How can real estate investors use private lender LendingHome to get fast access to capital, grow their portfolio, and secure low-interest rates on short-term loans? Check out our guide to LendingHome and how you can see the most benefit from using one of the industry’s best hard money lenders.
Before we get started, however, we need to clarify (again) that borrowing money can have lifeline consequences if done wrong. Be sure you fully understand what you’re getting into before you sign on the dotted line. With that out of the way, let’s jump in.
Related: Check our our complete guide to hard money lenders to learn more about this type of funding.
What Is LendingHome?
LendingHome is the nation’s largest hard money lender, which means they provide asset-based loans that are secured by real estate property. As a real estate investor, finding capital to fund your projects without high-interest rates or long periods of waiting is always top-of-mind.
Click for Video Explainer
Video Source: LendingHome Youtube Channel
Dealing with private lenders can be hit or miss, and the hassle of providing excessive documentation, proof of income, and waiting 15 or more days to close can further bog the process down.
LendingHome seeks to offer solutions to these problems by creating a loan experience that is fast, simple, and beneficial to all real estate investors. LendingHome has been around since 2013 and gets excellent user reviews.
Their team, including everyone from the founders to the account managers, is made up of dozens of experienced people in the real estate, finance, and engineering, and technology industries.
We wanted to create an investor’s guide to using this company and outline some of the ways it can help you grow your portfolio as an investor. We’ll look at the company from a few angles.
First, the services they provide (bridge and rental loans). Then, we’ll cover the average interest rates and loan details, LendingHome’s awards and accolades, and a step-by-step explanation of the loan process at LendingHome. Sound good? Let’s get started.
What Does LendingHome Do?
LendingHome is in the business of helping real estate investors quickly fund investment projects, both “fix and flip” bridge loans and rental loans, in the United States. Right now, they service investors in 28 states with capital, support, and tools for their projects.
Since 2013, LendingHome has connected investors with more than $5 billion, funding more than 23,000 projects so far. Bridge loans and rental loans enable investors to take on more projects and properties at once, keep most of their capital, and take a smaller cash stake in each project.
As an investor, you don’t want to work with a lender that isn’t trustworthy, respected, and well-known in the industry. LendingHome is the recipient of 3 prestigious awards. They are:
- 2019 Fintech Breakthrough Award: Best Digital Mortgage Product
- 2019 Forbes Fintech 50
- 2019 HousingWire Award: HW Tech100 Winner
LendingHome offers two types of loans for investors: Bridge loans and rental loans. Bridge loans are designed to finance and fund “fix and flip” properties, while rental loans are intended to fund properties investors intend to use as a rental for additional income.
After we look at each type of loan, we’ll walk you through LendingHome’s entire process from application to closing.
One of LendingHome’s services is bridge loans. Bridge loans are sometimes called swing loans or caveat loans. They are very short-term loans that help an investor “bridge” the capital gap between the time when they are waiting for cash from the sale of a home or property and before they purchase another.
Bridge loans provide the capital before the investor would typically be able to access it. LendingHome’s bridge loans have special interest rates, low closing fees, and zero application fees. Here’s the lowdown on what you can expect with their bridge loans:
Common Bridge Loan Terms
- Interest rates start at 6.50% with more than five exits*
- Interest rates start at 7.50% with fewer than five exits
- Closing fees start at $499 (5 or more exits) up to $995 (fewer than five exits)
- Close in 5 days potentially, up to 15 days if you have five or fewer exits*
- No application fees
- Access your loans online via a borrower dashboard
- Dedicated account manager each step of the way
These loans are a great fit for investors because you want to move forward quickly (closing in as a few as five days certainly helps) and secure lower interest rates.
*Rates as of time of publishing. Bridge loans are currently offered in the following states: Arizona, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Illinois, Kentucky, Massachusetts, Maryland, Michigan, Minnesota, Missouri, North Carolina, New Jersey, Nevada, New York, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, and West Virginia. Exit numbers are calculated over the last 24 months
LendingHome’s other service is rental loans. Their rental loans allow investors to finance as much as 80% of the property’s value without the need to provide the usual documentation like proof of income.
This speeds the process up and allows investors to purchase more properties in a shorter time, growing their portfolios. LendingHome’s rental loans have low-interest rates, no reserve requirements, and no minimum Debt Service Coverage Ratio (DSCR).
What else should you know about LendingHome rental loans?*
Common Rental Loan Terms
- Interest rates start at 5.125%
- Finance 2-4plex, detached-pud, and single-family properties
- Non-owner occupied properties only
- Entity borrowers and individuals borrowers are eligible
- FICO score minimum: 640
- Cash-out up to $500,000 after six month period
- After three years there is no prepayment penalty
- No hard pull on credit score
With a 6-month cash-out period and flexible requirements for borrowers and entities, LendingHome rental loans have lots of options that are in place to help real estate investors.
Investors can also choose from a few different mortgage options, depending on what best fits your finances and portfolio at the time:
- 3/1 Adjustable Rate
- 5/1 Adjustable Rate
- 7/1 Adjustable Rate
- 30-year Fixed Rate
*Rates as of time of publishing. Right now, LendingHome offers rental loans in the following states: Arizona, California, Colorado, Connecticut, Washington DC, Florida, Georgia, Kentucky, New Jersey, Nevada, New York, Oklahoma, Oregon, South Carolina, Tennessee, Texas, Virginia, and Washington.
The LendingHome Process Step-By-Step
Once you visit the LendingHome website, you will be able to select the property type you’re interested in getting funding for: Primary residence, secondary residence, or non-owner occupied.
You’ll enter the amount you are requesting for the loan and the value of the property you are requesting the loan for. You’ll click Submit and start the screening process. LendingHome begins screening your application as soon as it is received.
The LendingHome team will consider multiple factors as they screen your application, including the true value of your property, your real estate experience, credit history, FICO score, equity coverage, and more.
If LendingHome approves your application, you are given a pre-qualified terms summary before you receive the money. As you move through the process, LendingHome’s borrower dashboard will show your progress each step of the way.
Every request for information or documentation, a full borrower checklist, and records of your conversations with your account manager will all be available on the dashboard. The entire process can be completed in as little as five days.
Other LendingHome Considerations
- If you’re a high-volume investor, LendingHome will work with you to develop a customized mortgage experience that fits your business model.
- LendingHome will lend you up to $3 million with a one-time qualification.
- Your dedicated LendingHome account manager will be available to you during business hours every day of the week.
- LendingHome loans are for businesses or commercial projects, short-term, and will mature anywhere from 6 to 12 months.
- Applying is as simple as sending a completed PSA and SOW on the property.
- You’ll get your final loan terms within one business day after submitting the proper documents.
What makes LendingHome the right choice for a real estate investor? LendingHome can be a good option for both new investors and experienced investors. New investors can secure the capital they need with a relatively low-interest bridge loan.
They can then use these funds to purchase a second property before you’ve received the cash from the first one. That’s a major benefit, but the con here is that not all inexperienced investors will be approved during the application process due to a lack of demonstrated success as an investor.
Experienced investors can secure even lower interest rates, reduced closing fees, and shorten the length of time it takes to close. This makes LendingHome a great option for high-volume investors who flip more than five properties per year.
Is LendingHome Right for You?
Whether you’re new to real estate investing or a seasoned investor, LendingHome can give you access to fast, low-interest private funding that can help you grow your portfolio and manage a higher volume of properties.
While it may not be for everyone, they’ve built a reputation as the largest hard money lender in the country. So if you’re seeking a hard money loan, they’re certainly a great option to consider.
What lender are you planning to use for your upcoming investment projects? How do you access low-interest funding to fuel your progress as a real estate investor? Be sure to let us know!