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Hard Money Loan Calculator
Hard money loans are short-term, asset-based loans used by house flippers and developers. They have high interest rates and points, but fund fast based on the property's potential.
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How to use this calculator
- Enter your loan amount and the hard money interest rate (often 10-14%).
- Set the loan term in months (usually 6-12 months).
- Enter the 'points' charged upfront (1 point = 1% of the loan amount).
- Toggle between Interest Only (standard) or Amortized payments.
What your results mean
Hard money is expensive money. You'll see your monthly payment (usually interest-only), the steep upfront cost of the points, and the total cost of capital. Speed and leverage are what you're paying for.
5 tips for using hard money loans
- Never use hard money for a long-term hold unless you have a guaranteed, fast exit strategy (like a BRRRR refinance).
- Negotiate the points. If you're an experienced flipper, lenders will often drop from 2-3 points down to 1-1.5.
- Always have a contingency fund. If your flip takes 3 months longer than expected, the extra interest can wipe out your profit.
- Ensure the lender doesn't charge a prepayment penalty if you finish the flip early.
- Understand 'draw schedules'. Hard money lenders hold back rehab funds and release them in draws as work is completed.