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If you’re just getting started with the world of hard money lending, you may be wondering whether an uptick in federal interest rates will affect the rates for a hard money loan. To put it simply, hard money loans rates are affected by supply and demand.

Supply and demand play a pivotal role when it comes to hard money loans. Back when the housing market was still recovering in 2009 and there was still uncertainty about property values, there was little capital available for private lending purposes. As market conditions improved, rates decreased due to greater capital.

While hard money interest rates will remain affected by supply and demand first, there are a couple of factors that also come into the equation when it comes hard money loans.

Let’s use leverage, for example. If the “loan to value” (the amount borrowed compared to a property’s existing or potential value) is lower, then a hard money lender can offer lower rates. Underwriting is another area where a greater amount of underwriting will also result in lower rates.

This update is by hard money lending 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 hard money lenders FL or hard money lending Florida, please call 954-816-0388 or fill out our application.

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