Are Hard Money Loans Affected by Federal Rates?

When you’re just starting with the world of hard money lending, you might wonder if an upturn in federal interest rates would impact the rates for a hard money loan. To put it clearly, supply and demand influence hard money loan rates as opposed to federal rates.

When it comes to hard money loans, supply and demand are crucial players. Back around 2009 or so, when the housing market was still recovering and there was still incertitude regarding property values, not much capital was available for private lending. The rates decreased as business conditions changed due to higher resources.

Although hard money interest rates will remain first influenced by supply and demand, when it comes to hard money loans, there are a few variables that also need to be addressed.

For example, let’s employ leverage. If the “loan to value” (the amount borrowed as compared to the existing or potential value of a property) is lower, then lower rates may be offered by a hard money lender. Underwriting is another area where more underwriting may also result in lower rates.

This update is by hard money lend ers Miami company Monroe Funding Corporation, a direct equity lender serving clients throughout Central and South Florida. We specialize in first mortgages on non-owner occupied residential and commercial property investments as well as real estate loan options. Our fast and flexible loan programs get you to the closing table quickly and professionally. For more information on Broward County hard money lending , please call 954-816-0388 or fill out our application.