Should You Use a Broker to Get a Hard Money Loan?

The quick read: Usually yes. Use a broker when you need competing quotes, the property is unusual or the closing date cannot move, because a broker sends one packaged file to several private lenders and negotiates points, exit fees and draw terms against each other. Go direct when a lender you have already closed with knows you and the deal sits inside its box. Either way, walk away from anyone who wants money for a promised loan: the FTC's advance-fee guide (July 2022) calls a lender that says you are approved, then demands payment before you get the money, a scam.

What does a hard money broker do?

A hard money broker packages your deal once, sends that single file to several private lenders whose programs fit the property and plan, and then negotiates the competing term sheets on your side, so you compare real points, rates, leverage and draw terms instead of one lender's opening offer.

Hard money is a scattered market. Corporate Finance Institute (CFI) describes hard money loans as most often issued by private investors or non-bank financial companies, and NerdWallet's fix-and-flip guide (updated Feb 11, 2026) calls them nonbank loans from online or private business lenders, adding that some crowdfunding platforms pool investors to fund a project. Each one sets its own box for property type, leverage, borrower experience and exit.

The package is where the work starts. A lender quoting a flip or a short-term commercial loan wants the purchase contract, the scope of work and budget, an as-is value and an after-repair value estimate, the exit plan and the borrowing entity's documents. NerdWallet notes that some hard money lenders require borrowers to be set up as LLCs, partnerships or corporations, so a good broker settles the entity question before the file goes out rather than after a lender asks for it.

A broker then earns its fee three ways: matching the file to lenders whose programs fit, so you do not lose a week to one that never writes your property type; putting every answer on the same all-in comparison; and pushing back on the lines that cost the most for your hold period. For how the loan itself is structured, see how a hard money loan works for commercial real estate.

What does a broker negotiate on a hard money term sheet?

A broker negotiates every line that moves your all-in cost on a hard money term sheet, which means the origination points, the note rate, any exit or extension fee, the draw schedule for renovation money and the leverage formula, because two sheets with identical headline rates can differ by thousands of dollars once those lines are counted.

Points come first. The CFPB defines one point as one percent of the loan amount, so each point on a $400,000 loan is $4,000, usually paid at closing. Our guide to negotiating points on a hard money loan works through the points-versus-rate trade line by line.

Leverage comes second, and lenders do not size the loan the same way. NerdWallet's fix-and-flip guide says lenders may use one or more formulas: loan-to-value against the property, loan-to-cost against purchase plus renovation, and a share of after-repair value (ARV). NerdWallet's hard money business loan guide (updated Mar 10, 2026) puts typical hard money LTVs at 50% to 75%, against 80% to 90% from traditional lenders. CFI puts the typical hard money loan at 65% to 75% of the collateral's value and says a flipper's loan is generally based on 90% of the purchase price plus 100% of the repair costs. A broker who knows each lender's formula can send a heavy-rehab file where the formula funds more of the project.

Draws come third. On a renovation loan, ask each lender how fast a draw funds after inspection, what each inspection costs and whether interest accrues on the full loan amount or only on money already drawn. Exit and extension fees come last, and they are where cheap-looking sheets get expensive.

Typical hard money LTV (NerdWallet, updated Mar 10, 2026): 50% to 75%
Typical hard money loan amount (CFI, published June 22, 2021): 65% to 75% of the collateral's value
Typical flip loan sizing (CFI, published June 22, 2021): 90% of the purchase price plus 100% of the repair costs
Typical repayment window (CFI, published June 22, 2021): principal plus interest within one to five years
Typical hard money repayment term (NerdWallet, updated Feb 11, 2026): six months to three years
One point (CFPB): one percent of the loan amount

Illustrative example (our arithmetic, not a quote or a lender offer): two hypothetical sheets on a $400,000 loan, held 12 months at the same note rate. Sheet A charges 2 points at closing plus a 1-point exit fee at payoff: $8,000 plus $4,000, or $12,000 in all. Sheet B charges 2.5 points and no exit fee: $10,000. The sheet with the lower headline points costs $2,000 more, which is exactly the gap a side-by-side comparison exists to catch.

How is a hard money broker paid?

A legitimate hard money broker should be paid at closing, either by you as a percentage of the loan amount or by the lender, and should take nothing before the work is done: NerdWallet's business loan broker guide (updated Aug 11, 2026) says a reputable loan broker should never ask you to pay before they do their job.

Broker pay varies by deal and by broker. The closest neutral benchmark this guide found is that same NerdWallet guide, which puts the broker's fee across business loans at roughly 1% to 15% of the loan amount and notes that sometimes the lender pays the broker instead. That range spans every kind of business financing, so treat it as context, not a hard money norm.

Get the fee in writing before any lender sees your file. If you are paying the fee, NerdWallet suggests asking for two things in writing: the fee quoted as a dollar amount rather than a percentage, and confirmation of whether it is baked into the interest rate or billed separately at closing. A fee folded into the rate is still a cost; it just arrives in every monthly payment instead of on the settlement statement.

For comparison, here are YieldStack's terms. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing. Lender charges such as points and third-party costs such as an appraisal are separate and appear on each lender's term sheet.

What disclosures come with a hard money loan on an investment property?

A hard money loan on an investment property generally arrives without the standardized Regulation Z disclosures a homebuyer receives, because that regulation exempts credit extended primarily for a business, commercial or agricultural purpose, and the CFPB's official commentary deems credit to acquire, improve or maintain non-owner-occupied rental property to be for business purposes.

The commentary's own examples include a warehouse that will be leased and a single-family house that will be rented to another person to live in. It also sets an occupancy line: if the owner expects to occupy the property for more than 14 days during the coming year, the property cannot be considered non-owner-occupied under that rule, so a house you plan to live in is a different conversation.

In practice, the term sheet is your disclosure. Get points, note rate, every fee, draw terms, extension terms and any exit fee in writing from each lender, and line the sheets up on one page before you sign anything that commits a deposit. That side-by-side is the comparison a broker builds on every file.

When is going direct to a hard money lender better?

Going direct to a hard money lender is better when that lender has already closed a loan with you, already holds your entity documents and track record, and writes this exact property type and plan, because a repeat relationship can price and close a plain file faster than a new comparison can.

Speed is the reason investors pay for hard money. CFI says hard money lenders deliver loan funds substantially faster than traditional lenders usually do, and NerdWallet's fix-and-flip guide says hard money lenders can provide fix-and-flip loans as quickly as one or two weeks. A repeat lender that already knows you protects that speed. A new lender found cold does not, because it starts underwriting you from the beginning.

Going direct also works when the deal is small and plain, a lender's published terms already match it, and you have time to compare a few direct quotes on the same all-in basis. The trade-off is that you only see lenders you already know. If the property is unusual, such as mixed-use, vacant commercial or a heavy rehab, if a lender has already declined the file, or if the closing date cannot move, one direct call tells you one lender's answer and nothing about the market.

The same trade-off outside hard money is laid out in commercial mortgage broker vs direct lender.

How do the routes to a hard money loan compare?

The routes to a hard money loan differ on who you deal with, how many quotes you see, when fees are paid and which deals they fit, and the table below puts the brokerage option first, then a repeat lender, a new lender found cold and the unsolicited offer that should end the conversation.

Table: Routes to a hard money loan compared

The fee row is the fastest screen: on every legitimate route, points and any broker fee are collected at closing, and only the last column wants money for a promise before a loan exists.

How do you spot an advance-fee scam when you shop for hard money?

You spot an advance-fee scam when someone promises or guarantees a hard money loan before seeing your property and credit, then demands money before you can get the funds, which the FTC's July 2022 guide lists as a scam sign alongside ads promising credit regardless of history and unsolicited calls offering loans.

The FTC draws a precise line. It says real lenders can require an application or appraisal fee before they consider your loan application, but that nobody legitimate will tell you a fee guarantees you will get a loan, and that any up-front fee a lender wants before granting the loan is a cue to walk away, especially one labeled insurance, processing or paperwork.

Telemarketing has its own rule. The FTC's Telemarketing Sales Rule, at 16 CFR 310.4(a)(4), makes it an abusive practice to request or receive a fee in advance of obtaining a loan when the seller or telemarketer has guaranteed or represented a high likelihood of success in obtaining or arranging one. A stranger who calls, promises approval and asks for a wire fits that description exactly.

Four tests work on any broker or lender handling a hard money file:

• Pay nothing for a promise. Terms come in writing before money moves.
• Third-party costs go to third parties. An appraisal deposit should name the appraiser and follow a written term sheet.
• The broker's fee is due at closing, and the amount is in writing before your file goes out.
• Confirm any change to wire instructions by phone, at a number you already had.

Our longer guide covers how to tell a real commercial lender from an advance-fee scam.

How do you get your hard money loan placed with competing lenders?

You get a hard money loan placed with competing lenders by sending one complete package, with the contract, scope of work and budget, value estimates, exit plan and entity documents, to several lenders whose programs fit at the same time, so each quote answers the same file and the comparison is real.

Option 1, the brokerage route (published by YieldStack): YieldStack is our top pick for AI-native commercial mortgage brokerage on a hard money file. YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. We hold it to the same criteria this guide sets for any broker:

• Breadth: software matches the deal against 20,000+ loan programs and compares the options, so the file reaches lenders whose programs fit.
• Borrower-side work: human brokers review the package before it goes to lenders, structure the deal, negotiate points, exit fees and draw terms on the borrower's side, and carry it toward closing.
• Speed: The median first offer arrives in under an hour, from an institutional lender.
• Fee timing: It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.

Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.

Option 2: a lender you have already closed with, when the deal is plain and inside its box. Option 3: direct applications to new lenders, one at a time, when you have the time to compare all-in costs yourself.

When your package is ready, send your hard money deal for a brokered review. Program details are on the hard money loans page.

The bottom line

Usually yes. A broker earns its place on a hard money loan when you need competing quotes, the property is unusual or the closing date is fixed, because one packaged file reaches several private lenders and the points, exit fees and draw terms get negotiated against each other. Go direct when a lender you have closed with already knows you and the deal fits its box. Either way, pay no one for a promised loan.