What are Fix and Flip Loans?

Fix and flip loans are short-term loans used basically by real estate investors for purchasing and renovating a property before flipping it for a profit.

Fix and Flip loans are very much popular in the USA as these type of loans for flipping houses help investors fast closings for properties in any condition. Among fix and flip loans, the most popular are hard money loans. CCM-Finance offers fix and flip loans to investors with competitive rates in Twin Cities, USA.

There are basically 6 types of fix and flip loans in trend.These are:

Types of Fix and Flip Loans: 

Hard Money Loan: A hard money loan also referred as rehab loan is a short-term loan secured by real estate. These loans are utilized by fix and flippers to purchase and renovate a property. Investors normally utilize hard cash advances to buy, remodel, and sell a property with an year. These credits are perfect for fix and flippers since they fund properties in poor condition. Hard money loans approval and funding takes up to 15 days.

Loan Term: 1-3 Years
Time to Approval/Funding: 24 Hours for Approval & 10 - 15 Days for Funding
Interest Rates: 7% - 12%

Bridge Loan: A bridge loan is a kind of fix and flip loan that is issues for a short term. It is a temporary loan used to cover the time between two real estate transactions. It is used during purchase of one property before you sell another one. It helps you to purchase a new property without a need of selling your other property first.

Loan Term: 2 Weeks - 1 Year
Time to Approval/Funding: 15+ Days 
Interest Rates: 6.2% - 9%

Fix and Flip Loans

 Permanent Bank Loan/Online Mortgage: Permanent bank loans and online mortgages are lent for a term of 15 to 30 years. These loans are used to purchase long-term, owner-occupied or non-owner-occupied properties in good condition. Due to this reason permanent bank loans and online mortgages are not preferred by fix and flip investors as these loans and mortgages usually purchase distressed properties.

Loan Term: 15 - 30 Years
Time to Approval/Funding: 30 - 45 Days
Interest Rates: 4.5% - 6.6%

Cash Out Refinance Loan: A cash out refinance is a technique in which a fix and flip investor refinances an existing property to finance the purchase of a new investment property. These kind of loans help fix and flip investors in extracting equity from an existing property by issuing a new loan and paying off the existing mortgage. The primary advantage of cash out refinance is that you have no restrictions on how to spends the cash received via this kind of financing.

Loan Term: 15 - 30 Years
Time to Approval/Funding: 30 - 45 Days
Interest Rates: 3.99% - 6%

Home Equity Line of Credit: A home equity line of credit aka HELOC closely relates to credit card than a conventional loan in terms of working. In this, investors are issued a line of credit based on the value of their existing home. The interest rates are levied only on the amount borrowed just like a credit card.

Loan Term: 25 - 30 Years
Time to Approval/Funding: 30 - 45 Days
Interest Rates: 4.5% - 5.5% Variable APR

Investment Property Line of Credit: An investment property line of credit is a line of credit is pretty much similar to Home Equity Line of Credit, with an exception that it is specifically used on investment properties. It also works like a credit card but only pay interest on the money that you actually use. It is basically for short-term finance needs and can be used for both purchases and renovations of fix and flips.

Loan Term: 18 – 24 months
Time to Approval/Funding: Up to 30 Days
Interest Rates: 5.2% - 8%


Location: United States

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