Hard money pricing is a package: interest, points, and closing fees. Two deals with the same coupon can cost very different amounts once you factor hold time and whether the exit is clean. If someone quotes a number before they’ve heard the deal, treat that as marketing, not underwriting.
The three pieces of the bill
1. Interest rate
Usually an annual rate on a short-term loan (months, not decades). You’re paying for speed and asset-based underwriting. We don’t publish a single “Arizona hard money rate” here because the right number depends on the file. Ask on the call; we’ll talk in ranges once we know property, equity, and exit.
2. Points (origination)
Points are prepaid interest at closing — typically a percent of the loan amount. On a short bridge, points can matter as much as the coupon. A slightly higher rate with fewer points can beat a lower rate with heavy points if you’re out in a few months. Do the napkin math both ways.
3. Fees
Title, escrow, recording, appraisal or alternative valuation when needed, and whatever the deal actually requires. Good lenders itemize. Ask early.
What actually drives pricing
- Equity / leverage — thinner deals cost more risk premium
- Exit — sale, refinance, or “we’ll figure it out” (that last one is expensive if we’ll do it at all)
- Property type & condition — heavy rehab ≠ stabilized rental
- Timeline — rush files and broken contracts burn effort
- File quality — real scope, budget, and reserves change how a private lender sleeps
- Arizona specifics — local comps, permits, HOAs; we underwrite what we know
Bank vs hard money
| Bank / traditional | Hard money / private | |
|---|---|---|
| Cost of money | Usually lower if you qualify | Higher coupon + points; built for short holds |
| Speed | Weeks to months common | Often measured in days when the file is ready |
| Underwriting | Income, credit, guidelines | Asset, equity, exit, common sense |
| Best for | Long holds, clean files, stabilized collateral | Bridges, rehabs, timing gaps, bank said no / not yet |
Hard money is expensive per year and often sensible per deal when the alternative is missing a purchase or sitting vacant while a bank “reviews.”
When you should not use hard money
- You can close on time with cheaper debt that’s actually real
- No clear exit — hope isn’t an exit
- The deal only works at fantasy numbers
- You’re forcing short-term money into a long-term hold with no bridge purpose
- The property isn’t in Arizona — we don’t lend there
How to compare quotes without getting played
- Same loan amount, same hold assumptions
- Rate + points + known fees — not “rates from”
- Ask about minimum interest / prepay and extension costs
- Rehab? Ask about draws and inspection friction
- Who actually funds — brokered shop vs direct lender
Related
Not a commitment to lend. All loans subject to approval and underwriting.