Hard Money Loan Points and Fees: How Much Do Hard Money Lenders Charge?

If you have been asking how much do hard money lenders charge, the short answer is that most California hard money loans carry an interest rate plus points, and understanding hard money loan points and fees is the key to comparing offers accurately. At Fidelity Funding, hard money rates typically start at 9.99% and run in the 9.99% to 12.49% range depending on the property, the leverage, and the strength of your exit strategy, while points (an upfront percentage of the loan amount) usually land between one and three points. On top of that you will see the standard third-party closing costs that appear on almost any real estate loan.

The reason hard money costs more than a bank mortgage is straightforward: you are paying for speed, flexibility, and asset-based underwriting that lets you close in days rather than weeks. For a short-term project like a flip or a bridge acquisition, that premium is often trivial compared to the profit unlocked by winning the deal. This guide walks through every line item so you can price a hard money loan with confidence and avoid surprises at the closing table.

How Hard Money Loan Points and Fees Are Structured

The two headline numbers on any hard money quote are the interest rate and the points. The interest rate is the annual cost of borrowing, charged on the outstanding balance, and on most Fidelity Funding hard money loans it starts at 9.99% and typically ranges up to 12.49%. Because these loans are usually interest-only, your monthly payment is simply the balance multiplied by the annual rate, divided by twelve. That keeps carrying costs predictable during a rehab or a bridge period.

Points are a one-time origination fee expressed as a percentage of the loan amount, paid at closing. One point equals one percent of the loan. On a $500,000 loan, two points is $10,000. Points compensate the lender for underwriting, funding, and the operational cost of moving quickly, and they are often the single largest fee on a short-term loan.

Where borrowers get tripped up is comparing lenders on rate alone. A loan quoted at a lower rate but three points can cost more over a six-month hold than a slightly higher rate with one point. Always model the total cost over your actual expected hold period, not the headline rate.

The Third-Party Closing Costs to Budget For

Beyond rate and points, a hard money loan carries the same third-party costs as most secured real estate financing. These are not lender profit; they are fees paid to outside vendors and government offices, and they show up on your closing statement regardless of which lender you choose.

The largest of these is typically the appraisal, which confirms the property's as-is value and, for a rehab loan, its After Repair Value. Title insurance and escrow fees protect both you and the lender and clear any existing liens. You will also see recording fees, a document preparation or underwriting fee, and, on some loans, a small servicing setup fee.

Reputable lenders disclose all of these upfront on a term sheet or fee worksheet. If a lender is vague about junk fees or springs new charges near closing, treat that as a warning sign. Fidelity Funding provides a clear breakdown early so you can budget accurately and keep your deal's numbers intact.

What Actually Moves Your Rate and Points

Hard money pricing is risk-based, so the specifics of your deal drive where you land in the range. The single biggest factor is leverage. A loan at 55% loan-to-value has far more equity cushion than one at 75%, and lower leverage usually earns a lower rate and fewer points because the lender's downside is better protected.

Your exit strategy matters just as much. A clean, credible plan to sell or refinance within the loan term reassures the lender and can improve pricing. Experience counts too: a borrower with a track record of completed flips or a well-documented business plan is a lower-risk file than a first-timer, though strong equity can offset limited experience.

Property type and condition round out the picture. A standard single-family home in a liquid market prices better than an unusual property or a heavy rehab in a thin market. None of these factors are dealbreakers on their own, but each one nudges your rate and points within the 9.99% to 12.49% band.

How to Compare Hard Money Quotes Apples-to-Apples

The right way to compare offers is to calculate the all-in cost over your expected hold period. Add the total interest you will pay for the months you plan to hold, plus the dollar value of the points, plus the third-party fees. Then compare that total across lenders rather than fixating on any single number.

Also confirm the loan terms that affect flexibility. Is there a prepayment penalty? Many Fidelity Funding hard money loans have none, which is valuable if you sell or refinance ahead of schedule. Is there a minimum interest guarantee that charges a set number of months even if you pay off early? These details can materially change the true cost of a short-term loan.

Finally, weigh certainty of execution. A lender that closes on time protects your earnest money, your reputation with sellers, and your project timeline. On a competitive acquisition, reliability is worth paying a fraction of a point for. The cheapest quote is not a bargain if the loan falls through at the eleventh hour.

Hard money is priced for speed and flexibility, and once you understand how points, interest, and third-party fees fit together, comparing offers becomes simple. Model the all-in cost over your real hold period, watch for prepayment terms, and prioritize a lender that closes on time. With rates starting at 9.99% and transparent fees disclosed upfront, Fidelity Funding helps California investors price deals accurately and fund them fast.