Hard money loan calculator

A short-term loan from a private lender, secured by the property and sized on the deal more than on your income. Flippers use them because they close fast and fund the rehab. They cost more than a bank loan: higher rates, points up front, and terms of about 6 to 18 months.

One point is 1% of the loan amount, paid at closing. On a $210,300 loan, 2 points is $4,206. Points are a cost of the deal even though they don't show up in your monthly payment.

Some lenders charge interest on the whole loan, rehab holdback included, from the day you close (often called Dutch interest). Others charge only on the money you've actually drawn. This calculator estimates drawn interest by assuming the rehab money is drawn evenly over the hold, so on average half of it is out.

Lenders limit the loan to a percent of the after-repair value, often 70 to 75%. When your purchase and rehab percents ask for more than that, the lender usually trims the rehab holdback first, and you pay the difference in cash as the work happens.

The lender holds back the rehab money and releases it in draws after you finish stages of work, usually after an inspection. You front the cost of each stage, then request a draw to get paid back. Fixer Upper House tracks draws against the holdback and shows what you can request next.