Why are hard money loan fees so high?

Hard money and Private money loans are more expensive.  Rates and fees are NOT competitive with banks, government, or other conventional lenders.  If you qualify for a loan from one of these sources, we recommend staying away from hard money and private money loans. The main exception is if you need money quickly. Private hard money lenders require a rate of return similar to what can be obtained with other investing vehicles such as the stock market, commodities, long term bonds, etc. Brokers ask for more points because they not only process and originate the loan, they service the loan themselves over the entire loan term.

One way to keep charges to a minimum is by applying for 2nd and 3rd mortgages. The advantages are two fold: 1) if you have a low interest 1st mortgage, you can keep it and only pay higher interest on the cash out portion of your equity, 2) Closing costs are reduced because the loan amount is much smaller. It is less expensive to pay 10 points on a $50,000 2nd mortgage ($5,000), rather than 5 points on a $500,000 1st mortgage ($25,000).

HardMoneyLeads.com Inc.
PO Box 5928
Concord California 94524
(800) 606-3105


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