Hard Money Loan Cost
Hard money: 9-14% rate, 3-5 points upfront, 6-24 month term. Asset-based — focuses on property value not credit/income.
| Property value | — |
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| Points | — |
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Hard money loans are asset-based lending — secured by the property value, not borrower credit. 60-75% LTV typical. 9-14% interest. 3-5 points upfront. 6-24 month terms. Used by real estate investors when traditional financing isn't available.
Hard Money Underwriting
Property value first: 60-75% LTV typical. After-repair value (ARV) used for fix-and-flip. Credit secondary: 620+ minimum often. Income: minimal docs. Speed: 1-3 weeks to close. Higher rate compensates for risk.
Property Type Restrictions
Investment properties only (no primary residence in most states). Single-family, multi-family, mixed-use. Commercial possible but separate lenders. Rehab-heavy properties favored — that's the point.
Cost Comparison
Bank: 7% rate, 0 points. Hard money: 11% rate, 4 points. On $200K loan, 12-month: bank $14K interest. Hard money: $22K interest + $8K points = $30K. Difference: $16K. Worth it if deal gets you 30%+ profit.
Last updated May 2026. Sources: BiggerPockets Hard Money.