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Where are Hard Money Loan Rates Heading in 2024?

Success in real estate is about knowing when to strike, especially for new investors looking to build their portfolios. Investing at the right time could mean significant loss or profit, depending on market forces at that period. And while it’s hard to predict with 100% certainty economic booms and downturns, there are reliable indicators that can increase your chances of success.

So, with 2023 wrapping up, newbies and seasoned investors alike should be asking, “Where are hard money loan rates heading in 2024?” What trends should we expect in the new year, and how should it affect investment decisions?

Considering most property owners prefer to seek financing, such as hard money loans, to fund their investment, understanding potential trends that could affect the real estate outlook of the following year is crucial. What economic indicators should you look at? Do you need some insight into 2024’s loan rates? We’ve got you covered right here.

Mortgage Rates in 2024

Navigating the intersection of finance and real estate requires a holistic view. Despite the entry of 2024, making it over 4 years since the pandemic, we’re still very much in a post-COVID world, with its after-waves affecting current and future finances. To mitigate a total economic collapse, the Federal Reserve crashed interest rates below 3%, allowing homebuyers with enough cash to lock in great rates in late 2020 and early 2021. However, as inflation began creeping upward, so did the interest rates, bringing them to an average of 7.6% as of November 2023.

At double what it was a mere 2 years ago, experts believe interest rates will start at that average in early 2024 and then slowly drop. Federal Reserve rates could fall below the 6% line by the end of the upcoming year. Maryland Hard Money Lenders offers competitive loan terms to help you finance your rental property on time.

Pros and Cons of Getting Hard Money Loan During a Recession

money loan


  • Quick Approval

One of the well-known advantages of opting for a hard money loan is their quick approval rate. Hard money lenders often provide faster processing time than traditional banks, making it a viable option for urgent financial needs during a recession.

  • Asset-Based Lending

Low credit scores often hinder investors seeking traditional loans, but hard money loans eliminate that problem. Since approval is primarily based on collateral (property), it is accessible to individuals with financial challenges or lower creditworthiness, which is common during economic downturns.

  • Flexibility in Use

Hard money loans offer more flexibility. Besides investing in typical rental properties like SFUs, borrowers can leverage lucrative opportunities like rehabilitating distressed properties.


  • Higher Interest Rates

Typical hard money loan rates come with higher interest rates, potentially increasing the overall cost of borrowing. For investors experiencing an economic downturn, this hike can be a significant drawback.

  • Shorter Loan Terms

These loans often have shorter repayment periods, which may create added financial pressure for borrowers. Considering their rates are also higher, investors need a well-thought-out exit strategy that withstands the uncertainties of a recession to avoid defaulting.

  • Asset Seizure Risk

Repaying a hard money loan can be difficult, especially during a recession. Unfortunately, borrowers have to pledge assets (often the property investment) as a guarantee against defaults. So, if an investor cannot repay, there is a risk of property forfeiture.

Can Borrowers Negotiate Terms with a Lender?

Yes, borrowers can often negotiate terms with a lender, including those offering hard money loans. In fact, hard money lenders tend to have more flexibility than traditional leaving plenty of room for discussion if you have the proper leverage:

  • Interest Rates

Discuss the interest rates and explore if there’s room for adjustment based on your creditworthiness. Knowing where hard money loan rates are heading in 2024 can be a significant advantage and help you make an informed proposal. Also, consider the property’s value and market conditions when negotiating interest rates.

  • Fees and Costs

Many investors get hung up on interest rates, but additional fees can also affect the cost of your loan. Inquire about any other fees associated with the loan and negotiate to minimize or eliminate specific fees if possible.

  • Loan Duration

Finally, negotiate the loan term to align with your financial plans. Some lenders may be open to extending or adjusting the repayment period. So, discuss realistic expectations based on the lender’s policies and the nature of hard money lending.


Where are hard money loan rates heading in 2024? If the predictions are correct, the downwards. Although, amidst economic uncertainties, we’ll still have to watch how it unfolds in the new year. Still, it doesn’t hurt to make plans that align with that reality by discussing how to secure a hard money loan with your lender.

Navigating a loan during a recession demands a balanced consideration of pros and cons. While swift approvals and asset-based lending offer advantages, borrowers must tread cautiously amid higher interest rates and shorter terms. Thus, negotiating terms is pivotal in mitigating risks and optimizing benefits.

Cheryl Henson

Cheryl Henson is a passionate blogger and digital marketing professional who loves writing, reading, and sharing blogs on various topics.

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