Learn › Process
To get a hard money quote, you need your deal specifics ready: deal type, purchase price, rehab budget, ARV, property location, borrower experience, and target loan amount. Submit those to a matched lender and they will return a term sheet (LOI). Get quotes from at least two lenders before committing. Compare on rate, points, LTC, term, draw structure, and prepayment — not rate alone.
A lender cannot quote a deal they do not understand. Before you contact a lender for a quote, have these numbers ready:
For fix and flip:
For DSCR/rental:
For construction:
The cleaner your input, the faster and more accurate the quote.
A term sheet (also called a Letter of Intent or LOI) is the lender's proposed loan terms. It is non-binding — it is not a commitment to fund — but it gives you everything you need to compare lenders.
Read every line. Specifically look for:
Interest rate — Hard money rates typically range from 9-13%+. This is an annual rate on a short-term loan, so the total interest cost is manageable even at the high end.
Points / origination fee — Charged at closing as a percentage of the loan amount. 1-4 points is typical. Two points on a $300,000 loan = $6,000 at closing.
Loan amount and LTC/LTV — How much the lender will actually fund and at what percentage of cost or value.
Loan term — How many months before the loan is due. 12 months is standard for fix and flip. Some lenders offer 18-24 month terms on construction.
Draw schedule structure — For fix and flip and construction loans, how is the rehab holdback disbursed? What milestones trigger each draw? Who inspects? How long does a draw take to fund once requested?
Dutch vs. non-Dutch interest — Are you paying interest on the full committed loan amount from day one, or only on what you have actually drawn? This can be a meaningful difference over the life of a project.
Prepayment penalty — Is there a penalty for paying off the loan early? Some lenders have none. Others have a minimum interest period (you owe interest for at least 3-6 months regardless of when you pay off).
Key conditions — What are the stips the lender is signaling upfront? Insurance requirements, title requirements, appraisal, borrower documents?
Some things that matter will not appear in the term sheet. Ask directly:
The answers tell you a lot about whether this lender actually fits your deal — not just whether the rate is competitive.
Do not pick a lender based on one number. Rate is the most common thing borrowers fixate on, and it is rarely the most important variable on a short-term deal.
Compare lenders on:
A lender with a 10.5% rate who closes in 30 days might cost more than one with an 11% rate who closes in 10 days — if your purchase contract has a hard deadline.
Present your borrower with a clear comparison. Table format works well. Let them make an informed decision.
As a broker, your fee is typically paid by the borrower at closing — separate from the lender's points and origination fee. Be transparent about your fee upfront. Borrowers who are surprised at the closing table by a broker fee they did not know about do not refer their friends.
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