Hard Money Lenders in Florida: What They Cost and When to Use One
Hard money lenders Florida investors use price on the asset and close fast. Here is what rates and points really cost, and when the speed is worth it.
Educational content only. This article is for informational purposes and does not constitute financial, legal, or lending advice. Loan programs, rates, and eligibility requirements change frequently. Consult a licensed mortgage professional before making any borrowing decision. Mortgage Capital | NMLS# 1859012 | Licensed in Florida.
Hard money lenders Florida investors work with underwrite the property, not the borrower. That is why they close in days rather than weeks.
You pay for that speed in rate and points. Whether the trade is worth it depends entirely on what the speed buys you. Our hard money loan page covers the structures available.
What it actually costs
Rates commonly run in the high single digits to low teens, with one to three origination points on top.
Points matter more than rate on a short hold. Two points on a nine-month loan adds far more to the annualized cost than two points on a thirty-year mortgage would.
The hard money calculator shows the effective annualized cost, which is the honest number to compare against conventional financing.
When the speed is worth paying for
Auction and foreclosure purchases, where the closing window runs to days and conventional financing simply cannot perform.
Properties that will not pass a conventional appraisal. A house with a failed roof or no working kitchen stays uninsurable and unfinanceable until someone repairs it.
Competitive offers, where cash-equivalent speed wins the contract at a lower price than a financed offer would have needed.
How Florida lenders size the loan
Most lend a percentage of purchase price, or of after-repair value on a renovation. Loan-to-cost of 80% to 90% is common for experienced investors.
Experience matters to pricing. A first flip prices worse than a tenth, and some lenders will not fund a first-timer without a contractor of record.
Model the whole deal on the fix and flip calculator before you commit, including holding costs. Florida vacant-property insurance during renovation is a real line.
Planning the exit
Hard money is interest-only with principal due at payoff, so the exit is the deal. Lenders underwrite it as closely as the property.
Selling is one exit. Refinancing into a DSCR loan after you lease it is the other, and that is how most rentals reach permanent financing.
For a buy-before-you-sell situation on your own home rather than an investment, a bridge loan is usually cheaper. Talk to us before you commit to either.
Hard money sits outside agency lending, so the consumer protections differ from a conventional mortgage. The CFPB explainer on non-QM lending is worth reading before you sign a short-term note.