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Exploring Competitive Interest Rates for Hard Money Loans

By G. David Lapin On November 28 2023

Interest Rates For Hard Money Loans

When pursuing hard money loans, it's vital for potential borrowers to grasp the factors influencing interest rates. These rates can vary significantly based on variables like real estate income, collateral type, overall property condition, the borrower's creditworthiness, and the loan-to-value ratio. Often favored by real estate investors and self-employed individuals looking to leverage their properties for business growth, hard money loans provide quick financing solutions, especially beneficial for those ineligible for traditional bank loans.

Given the heightened risk associated with hard money loans, interest rates are frequently higher compared to traditional mortgages, commonly ranging from 8% to 12% or even higher. Additionally, lenders may introduce extra charges like origination fees or points.

Prospective borrowers are strongly urged to thoroughly review and understand the specific terms of a hard money loan, covering interest rates, fees, and repayment terms, before committing to an agreement. Hard money loans emerge as a valuable alternative to non-banking real estate loans, offering a pathway for borrowers to advance their real estate ventures or business endeavors. It's crucial to note that, in addition to interest rates, lenders/mortgage brokers will impose charges like origination fees or points, underwriting fees, loan processing fees and all other third party fees. 

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Hanover Mortgage Company is California licensed only. Real Estate Broker – California Department of Real Estate. Broker License #01410448 │ NMLS I.D. Number: 337458. INTEREST RATES CAN CHANGE WITHOUT NOTICE. ASK US FOR CURRENT RATE INFORMATION. BORROWERS AND PROPERTIES MUST QUALIFY. CONDITIONS AND RESTRICTIONS MAY APPLY. Loan programs, amounts, rates and terms are subject to change without notice. Loan approval is not guaranteed and all loan applications are subject to verification of acceptable credit, income, employment, lien position and value of collateral in the sole discretion of Hanover Mortgage Company. Flood and/or property hazard insurance may be required. Additional fees, conditions, restrictions and limitations may apply. Not all programs are available in all areas. The interest rate for adjustable rate mortgage loans is subject to increase. Please contact Hanover Mortgage Company to determine your eligibility for a specific loan product. Hanover Mortgage Company does not offer financing for those transactions defined as ‘Covered Loans’ or ‘High Cost Loans’ in any state or federal law. Hanover Mortgage Company is a Mortgage Broker. Mortgage Broker fees will apply unless stated otherwise. Disclosure: Money invested through a mortgage broker is not guaranteed to earn any interest or return and is not insured. State law dictates that we acknowledge that interest on trust deeds is not guaranteed. No investment is completely risk free and past performance is not a guarantee of future results. Before investing, investors must be provided applicable disclosure documents. Investment Products: Are Not FDIC Insured • Are Not Bank Guaranteed • May Lose Value • Are Not a Deposit • Are Not Insured by Any Federal Government Agency.