Hard Money Loan Calculator
Calculate the true cost of hard money / bridge financing including points, interest, and fees.
1 point = 1% of loan amount
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Expert FAQ
Why is ARV (After Repair Value) favored over Purchase Price?
Hard money lenders focus on the collateral's exit value. By lending against 70-75% of ARV, they protect their downside even if the borrower defaults mid-renovation.
What are "Points," and how do they impact the IRR of a bridge loan?
Points are front-end fees (1-3% of loan amount). On a short-term 6-month loan, 2 points effectively adds 4% to the annual interest rate, making the "real" cost much higher than the nominal rate.
How do "Draw Schedules" function in renovation lending?
Funds are released in tranches (draws) based on completed work. Lenders send inspectors to verify milestones before releasing capital to prevent the borrower from over-leveraging.
What is the "Personal Guarantee" in hard money?
Despite being asset-based, most private lenders require an "Unlimited Personal Guarantee" to ensure the borrower is fully committed and to simplify the foreclosure process if things go south.
Why are bridge loans almost always "Interest-Only"?
Since the properties are often non-cash flowing during rehab, an interest-only structure minimizes the borrower's monthly carrying cost, preserving capital for the actual renovation.