Probably the most asked question when someone is calling to find out about hard money is, “What is the interest rate?”

The short answer, which is also not very specific, is that rates usually range from 10 – 12%. In some cases, we have done deals with rates below 10% but those tend to be cleaner deals.

Before we can accurately answer the question, we need to know some of the details of the loan. Some of these things are: loan amount, purchase price (if it’s a purchase), property value, what type of property and the location of the property. There are other factors that can affect the rate too.

For example, if a borrower has excellent credit, he will be more likely to get a lower rate than if he has never paid anything on time in his life. This doesn’t have as much effect as the equity in the property but can still have some bearing on the outcome.

Ultimately, the rates on private money loans are determined by the investors who supply the money for these loans. Consequently, it is not always possible to know exactly what rate can be given on a particular deal until we actually get it approved. However, we usually have a pretty accurate estimate of what is possible.

So, when you want to know what rate is actually possible on a private money transaction, get the main facts of the deal together and call or e-mail us.