Of course that is a question you could ask, but really it is not what is being asked. Are hard money loan rates high compared to____? That is really what it boils down too. Compared to a mortgage loan? So what? They are not even the same thing. Apples and oranges, right?
What you really want to ask is…
- What are the hard money loan rates for the loan I want, considering the circumstances I am currently in?
- What is the purpose of the loan you need?
- What is your credit like?
- Do you have business partners?
- What kind of security can/will you offer?
- Are there going to be cash flow considerations?
When you are looking at your options make sure that you compare rates for the same types of loan, and only for those loans for which you will qualify. If you need a loan for purchase of raw land don’t look at hard money loans for a fix and flip. And if you need a short term loan for something like house flip you certainly would not want to look at a loan with a 30 year term.
If you have bad credit don’t look at loans that will be extended only to those with great credit, you will only waste your time and get frustrated.