Hard money loan rates can vary depending on several factors, including the lender, the borrower’s creditworthiness, the loan-to-value (LTV) ratio, the property type, and prevailing market conditions. Here are some general guidelines for hard money loan rates:
- Interest Rates: Hard money loan interest rates typically range from 7% to 15% or more, depending on the risk factors involved. Rates at the higher end of the spectrum are common for riskier loans or borrowers with lower credit scores.
- Points: Hard money lenders often charge “points” as an upfront fee, which is a percentage of the loan amount. Each point typically represents 1% of the loan amount. For example, if a lender charges two points on a $100,000 loan, the borrower would pay $2,000 upfront.
- Loan Terms: Hard money loans typically have shorter terms than traditional bank loans, ranging from six months to three years or more. Some lenders may offer extensions or renewals, but these may come with additional fees or higher interest rates.
- Loan-to-Value (LTV) Ratio: Hard money lenders base their loan amounts on the appraised value of the property and often cap the LTV ratio at 70% to 80%. This means borrowers may need to provide a down payment or have equity in the property to secure the loan.
- Property Type: The type of property being financed can impact the interest rate and terms of the hard money loan. Lenders may view certain property types as higher risk and charge accordingly.
- Market Conditions: Hard money loan rates can fluctuate based on changes in the overall economy, real estate market trends, and lender competition. Borrowers may find better rates during periods of low interest rates or increased lender competition.
It’s essential for borrowers to shop around and compare offers from multiple hard money lenders to find the best rates and terms for their specific needs. Additionally, borrowers should carefully review the terms of the loan agreement, including any fees, prepayment penalties, and default provisions, before committing to a hard money loan. Working with an experienced real estate attorney or financial advisor can help borrowers navigate the complexities of hard money lending and make informed decisions.
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.
