Negotiating your terms

Most quotes land in 10% to 12%, with fix-and-flip paper generally 9.0% to 14.0% and first-time borrowers or unusual collateral running up toward 18.0%. Ranges reflect pricing lenders and industry write-ups publicly advertised as of August 2026. They are advertised ranges, not transaction data - unlike conventional mortgages, private lending has no public loan-level dataset, so nobody can honestly claim to know the true national average. Treat them as a sanity check on a quote, not a benchmark you are entitled to.

But the interest rate is the least useful number on the term sheet. A loan at 10% with 3 points, a $1,495 doc fee, six months of guaranteed interest and interest charged on the undrawn rehab holdback is substantially more expensive than a loan at 12% without those terms. Compare all-in cost, never rates.

See above - 10% to 12% is the common band. The more useful question is what the loan costs in total dollars over the months you will actually hold it, which is what the true-cost calculator computes.

One point is one percent of the loan amount, charged up front. Two points on a $300,000 loan is $6,000, usually deducted from your proceeds at closing rather than billed.

The detail that costs people money: ask whether points are charged on the total loan facility or on the initial funding. If you are borrowing $240,000 for the purchase and $60,000 for rehab, two points on the $300,000 facility is $6,000 - but you only receive $240,000 at closing, so you paid 2.5% on the money you actually got. That gap is standard and rarely volunteered.

$1,000. Points are simply a percentage of the loan amount, so two points is 2% - and on a small loan the flat fees matter far more than the points. A $50,000 loan with 2 points ($1,000) plus a $1,495 doc fee and a $750 underwriting fee carries $3,245 of closing cost, which is 6.5% of the loan before a day of interest. Flat fees are why small hard money loans are disproportionately expensive.

There are usually nine, and a term sheet typically leads with two. The full stack is origination points, underwriting or processing, document preparation, valuation, per-draw inspection, wire and servicing, extension, exit or back-end, and minimum or guaranteed interest. The fee stack, line by line walks through each one with the range you should expect and the question to ask about it.

Not the way most calculators do it. The typical online hard money calculator multiplies loan amount by rate by months and adds points. That undercounts real cost, often badly, because it ignores five things: interest charged on the undrawn rehab holdback, minimum-interest clauses, per-draw fees, extension fees on the months you run over, and the flat fees that dominate on smaller loans.

The honest calculation is: (all interest actually charged under the lender's accrual method) + (points on the basis the lender uses) + (every flat fee) + (draw fees x draws) + (exit fee) + (extension fees if you run long), then expressed as an annualised rate on the money you actually had use of. Ours does that: true-cost calculator.

There is no answer to this question, and any page that gives you one is almost always compensated for it. Hard money is local, product-specific and experience-tiered: the best lender for a $180,000 flip in Ohio for a first-timer is not the best lender for a $2m ground-up in Los Angeles for a builder with twenty projects.

What you can do is compare three quotes on identical assumptions and pick on all-in cost and on how the paper is written.

We do not publish a best-lenders list and never will, because the honest answer is "it depends on your deal" and a paid answer is just an advert. This site takes no money from lenders, carries no advertising, and sells no leads - so we have nothing to gain from sending you anywhere. How this is funded.

For the right deal, yes. The test is whether the loan is buying you something - speed, access, or leverage you genuinely need - rather than simply being the only lender who said yes. "They were the only ones who would do it" is a warning, not a recommendation.

Four checks, all free, all doable in about twenty minutes. Look the entity up on NMLS Consumer Access if your state licenses this kind of lending. Confirm the company is registered and in good standing with the Secretary of State where it claims to operate. Ask for two recent borrower references and actually call them. And insist that any money you send goes to a licensed title or escrow company, never to the lender directly.

The single strongest signal is the last one. A legitimate private lender is paid at closing out of proceeds. See how to verify a lender.

Guaranteed approval before anyone has looked at the property. A fee demanded before closing, especially by wire, gift card, crypto or a payment app. Pressure to decide today. No physical address, or an address that is a mail drop. A name that is a near-miss for a real lender's. Contact only through a free email domain. Documents with no entity name, no state, and no signature block. And an unwillingness to route funds through title or escrow.

The Federal Trade Commission's guidance on advance-fee loans is the plain-language reference, and it applies squarely here.

Legitimate third-party costs - an appraisal, a credit check, sometimes an application or underwriting deposit - are genuinely paid up front by real lenders, and that is normal. What is not normal is a fee that must be paid to the lender, by irreversible means, as a condition of releasing funds that have supposedly already been approved.

The distinction that matters: a real cost is payable to a named third party, is documented, and is disclosed before you commit. A scam fee appears late, goes to the lender or an individual, and is urgent.

Enough that the FTC publishes standing guidance on advance-fee loan fraud, and enough that multiple legitimate private lenders run pages warning about impersonators using their names. The vulnerability is structural: this is a lightly regulated corner of lending, borrowers are often in a hurry, and the product normally does involve fast wires - which is exactly the cover a fraud needs. See advance-fee loan scams.