Hard money loan interest rates in 2025 vary based on factors such as the lender, borrower’s experience, and specifics of the deal. Here’s an overview:
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Interest Rates: Typically range from 9.5% to 15%. For example, New Silver Lending offers rates between 9.5% and 11.25% , while Prime Plus Mortgages in Phoenix starts at 10% .
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Origination Fees (Points): Usually between 1% and 3% of the loan amount. New Silver Lending charges 1.25% to 1.75% , and Sherman Bridge Lending’s fees start at 2%
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Loan-to-Value (LTV) Ratios: Often up to 90% of the property’s purchase price, with some lenders offering up to 100% financing for construction or repairs.
These rates are influenced by the borrower’s creditworthiness, investment experience, property type, and regional market conditions. Given the dynamic nature of interest rates, it’s advisable to consult multiple lenders to secure the most favorable terms for your specific situation.
Whether a hard money loan is a good option depends on your specific situation and financial goals. Here’s a breakdown of when it makes sense and when you might want to consider alternatives.
✅ When a Hard Money Loan is a Good Choice
✔ You Need Quick Financing – Hard money loans are approved and funded much faster than traditional bank loans (sometimes in a few days).
✔ Your Credit Score is Low – These loans are asset-based, meaning lenders focus more on the property’s value than your credit history.
✔ You’re a Real Estate Investor – If you’re flipping a house or need short-term financing for an investment, a hard money loan can provide the capital to make a deal happen.
✔ You Can Handle High Interest Rates & Short Terms – If you have a solid exit strategy (e.g., selling the property or refinancing), a hard money loan’s higher interest rate (9.5%–15%) may be worth it for the quick access to capital.
✔ You Need Bridge Financing – If you’re waiting for traditional financing but need to secure a property immediately, a hard money loan can bridge the gap.
⚠ When a Hard Money Loan Might Not Be the Best Choice
❌ You Need Long-Term Financing – Hard money loans usually have short terms (6 months to 3 years). If you need financing for a long-term investment, a traditional mortgage may be better.
❌ You Can Qualify for a Conventional Loan – Bank loans typically offer much lower interest rates (6%–8% vs. 9.5%–15% for hard money). If you can qualify for a traditional mortgage, it’s usually the more cost-effective route.
❌ You Don’t Have a Clear Repayment Plan – Since hard money loans have high rates and short terms, failing to refinance or sell the property in time can lead to financial trouble or even foreclosure.
❌ You’re Buying a Primary Residence – Most hard money lenders focus on investment properties, not personal homes. If you’re buying a home to live in, a conventional or FHA loan is usually a better option.
🔍 Bottom Line
A hard money loan is a great tool for short-term real estate investment, fast financing, or situations where traditional banks won’t lend. However, for long-term property ownership, lower-cost financing, or if you have time to wait for approval, a traditional loan is usually better.
Phoenix Hard Money Real Estate Loans
If you’re interested in getting involved with real estate investing and need the capital to purchase properties hard money is a great way to get started. Brad Loans has extensive experience in both real estate investing and hard money lending and is proud to offer Phoenix Valley real estate investors the financing they need. It is easy to get started applying for hard money loan and Brad Loans is able to work with clients with bad credit and no credit. We are your source for hard money when traditional banks say no. Read more about Brad Loan’s hard money loan programs or get started fill out our hard money loan application or give us a call to ask questions at 602-999-9499.
