When obtaining a hard money loan, there is more to consider in the negotiation than just the interest rate. Hard money lending companies are typically run by savvy, very skilled and highly knowledgeable individuals. To get good terms, you'll have to know the ins and outs of hard money loan deals.
Hard money lending income for a hard money loan can come in a variety of forms and from a variety of sources:
- Points - Paid by you as part of your closing costs.
- Underwriting or Other Fees - Paid by you as part of your closing costs.
- Referral Fees - Paid by your lender to another hard money lender for referred business. (You could pay, as part of your closing costs, if your lender owes a referral fee for your business.)
- Loan Servicing - Paid by the private investor to the hard money lending company, if the hard money loan is serviced by the company.
- Late Fees - Paid by you if your payment is not made on time.
- Default Interest - An increased interest rate if there is a breach of the hard money loan terms.
- Foreclosure Fees - Added to the balance of your loan.
- Renewal Fees - Paid by the you to renew the loan for an additional term.