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Hard money loan rates: how flip pricing works
What sets the rate on a hard money loan, how the cost adds up during a flip, and how to get your own pricing.
Get my termsHouston hard money lenderHow are hard money loan rates set?
Short answer: hard money loans cost more than bank loans because they close fast, fund distressed houses and are short-term. Pricing is an interest rate, usually interest-only, plus points paid at closing, and it depends on the deal, your experience, your credit and how much of the purchase and rehab the lender funds. To see your pricing, send your deal and a loan officer sends your terms.
Get my terms: enter your purchase price, rehab budget and after-repair value, send the deal, and a loan officer sends your pricing.
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Your loan amount shows as you type. Send the deal and a loan officer follows up.
Estimate only. Loan amount is the lower of 100% of purchase plus rehab or 70% of the sale price when finished (after-repair value). Minimum loan $150,000. Business-purpose loans on investment property.
What moves a hard money rate
- Leverage: funding 100% of purchase and rehab is priced differently from 80%
- The deal: a wide gap between total cost and ARV lowers risk
- Experience: flips completed and sold
- Credit
- Loan size and term
How the cost adds up
- Interest: usually interest-only, paid monthly while you renovate and sell
- Points: a one-time fee at closing, as a percentage of the loan
- Fees: processing, draw inspections, extensions
- Time: every extra month adds interest, so a fast rehab saves money
Size the loan in the hard money loan calculator, then send the deal for pricing.
Rate vs leverage: what matters more on a flip
A lower rate that needs 20% down ties up cash you could use on the next deal. On a $240,000 flip, 20% down is $48,000. With 100% of purchase and rehab funded, your cash stays free. Compare the full cost, not just the rate. See 100% fix and flip financing.
Fees to ask about
- Points
- Processing or underwriting fee
- Draw or inspection fees on the rehab
- Extension fees if the flip takes longer
- Prepayment terms
Questions investors ask
Straight answers about hard money loan rates.
What are your hard money loan rates?
Pricing depends on the deal, your experience and credit. Send your deal using the form on this page and a loan officer sends your terms.
Are hard money loans interest-only?
Usually yes. You pay interest monthly and repay the balance when you sell or refinance.
What are points on a hard money loan?
An upfront fee, where one point equals 1% of the loan amount, paid at closing.
Why are hard money rates higher than bank rates?
The loans are short-term, close fast and fund houses banks will not, so the lender takes more risk.
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