Short-term financing secured against a property instead of against you. Here is how it is structured, what it costs in 2026, and the one thing that decides whether it works — written plainly, by a brokerage that places these deals rather than sells them.
A hard money loan is short-term financing secured against a property rather than against you. The lender's question is not what you earn or what your credit history looks like — it is what the property is worth, what it will be worth once the work is done, and how you intend to pay the loan back.
That single difference is why a hard money deal closes in days when a bank takes a month or more. There are no tax returns to verify, no employment to confirm, no debt-to-income ratio to satisfy. There is a property, a plan and an exit.
It is also why hard money costs two to three times what a conventional mortgage costs. You are buying speed and access, and both are priced accordingly.
Almost every hard money loan works the same way, and it is not how a normal mortgage works at all.
Honest numbers, including the ones lenders tend not to lead with.
| Cost | Typical 2026 | What it means in practice |
|---|---|---|
| Interest rate | 8%–15% | Against roughly 6.75% on a conventional 30-year. Second-position loans run higher, around 12–14%. |
| Points | 1.5–3 | Paid up front at closing. One point is 1% of the loan. On $400,000 that is $6,000 to $12,000 before you own anything. |
| Term | 6–24 months | Interest only, balloon at the end. |
| Leverage | 65%–80% LTV | You cover the rest. Down payments commonly run 10% to 30% depending on how the deal is structured. |
| Reserves | 3 months | Lenders want to see cash to cover holding costs if the job overruns — interest, taxes, insurance, utilities. |
| Extension | 1–2 points | If you run past the term. Better than defaulting, and it eats margin quickly. |
| Construction | from 8.5% | Our lending partners' ground-up programme, against a market range of 11% to 15%. $100,000 to $3 million, 12 to 24 months, credit 650, up to 85% of after-repair value. |
| Speed | 3–14 days | Against 30 to 60 for a conventional mortgage. This is what you are actually paying for. |
Through our lending partners, fix-and-flip and bridge financing runs from 10.99% plus 1.99 origination points, up to 100% of cost and 70% of value, from $50,000, with a minimum credit score of 600 and terms to twelve months. That best pricing is reserved for borrowers who have already paid off deals in good standing.
People use these interchangeably and they are not the same thing. Getting them wrong is how a deal you thought was funded turns out to be short.
Ask which of the three a quote is based on. An offer of 100% LTC capped at 70% LTV is a very different amount of money from 100% LTC with no cap, and only one of those exists.
This surprises people, and the answer is federal law rather than lender preference.
Regulation Z, which implements the Truth in Lending Act, imposes a heavy stack of disclosure and ability-to-repay obligations on consumer mortgages secured by a primary residence. Hard money lenders underwrite the asset rather than the borrower's ability to repay from income, which is precisely what those rules exist to prevent. So the product is written for business purposes only, on non-owner-occupied property, and normally to an entity rather than to you personally.
If a lender offers you hard money on the house you live in, that is a reason to walk away rather than a lucky find.
Everything else about hard money is arithmetic. The exit is the part that decides whether it worked.
You are on a clock from the day you close. At the end of the term the full balance is due, and there are only three ways to produce it: sell the property, refinance into longer-term financing, or pay it off from other funds. If none of those happens on time you are looking at extension fees, and beyond that, foreclosure on the property securing the loan.
So the exit gets planned before the loan is applied for, not afterwards. If the plan is to sell, be honest about how long properties are actually sitting in that market right now, not how long they sat two years ago. If the plan is to refinance into a DSCR loan, check the property will meet that lender's ratio and leverage rules while you are still in a position to walk away.
The investors who get hurt by hard money are almost never the ones who paid too much interest. They are the ones whose exit slipped by four months.
Short-term financing secured against a property rather than against your income or credit. The lender assesses what the property is worth, what it will be worth after renovation, and how you plan to pay the loan back.
Typically three to fourteen days once valuation and title work are done, against thirty to sixty for a conventional mortgage. Speed is the main reason investors use them, and it is what wins competitive and distressed deals.
Far less than a bank wants. Our lending partners set a minimum of 600 for fix-and-flip and bridge. Credit affects your pricing and leverage more than whether you are approved at all, because the property carries the underwriting.
One point is 1% of the loan amount, paid at closing. Hard money origination commonly runs 1.5 to 3 points, so on a $400,000 loan expect $6,000 to $12,000 in origination alone, before appraisal, title and recording.
Sometimes, but read what it is measured against. Offers of 100% of cost are still capped by a loan-to-value or after-repair-value ceiling underneath. Ask which number the cap uses before you rely on the figure.
No. These are business-purpose loans on non-owner-occupied property. Regulation Z places consumer-protection obligations on loans secured by a primary residence that asset-based lending is not built to satisfy.
Most lenders will extend for an additional fee, commonly one to two points plus continued interest. That is better than defaulting and it eats into margin quickly. Beyond that the lender can foreclose on the property.
In practice, yes. Both mean asset-based lending funded privately rather than by a bank. Dominion Hard Money is a brokerage: we place your deal with the lender whose terms fit it, rather than lending our own capital.
Answer these and we will tell you whether it is fundable, on what terms, and how fast it could close. Investment property only — we do not lend on a home you will live in.
We will run the numbers and come back to you. If it is time-sensitive, call 903-636-7511.
Dominion Hard Money arranges private and asset-based real estate financing for business purposes only. Not a commitment to lend. All loans subject to underwriting, property review, and approval. Terms vary by property, borrower experience, and exit strategy.