When applying for a conventional mortgage, it’s fairly simple to keep track of existing interest rates while having a largely solid foundation of what to expect. With hard money loans, however, they can be trickier to predict. They do have some factors that considerably affect the loan you’ll ultimately receive.

Let’s take supply and demand, for instance. If there are a lot of private or hard money lenders in a certain area, you may receive a lower rate to boost competition. Then again, interest rates may be higher if the lender is one of the few willing to lend money in the area you’re interested in.

While hard money loans have earned much acclaim for their quick funding turnaround times, the interest rate may be affected by just how quickly the money is needed. A hard money loan can be granted in just hours, but if you can close in a couple of days instead, there are potentially greater odds of a better rate. This is because underwriting the loan in a short timeframe constitutes a greater lender risk. Hence, the more time you give, the more due diligence and underwriting that can be done.

Loan-to-value (LTV) ratio is one you may be familiar with. As opposed to a conventional lender, hard money lenders rely on asset-based loan underwriting, which means the LTV holds much greater importance versus a credit score when figuring out the interest rate for the loan.

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