Hard money vs. mortgage broker — what's actually right for your deal?
If you're searching for a private lender or hard money loan, a licensed mortgage broker may get you better terms. Here's an honest comparison.
Side-by-side comparison
| Hard Money / Private Lender | Tayton Capital (Mortgage Broker) | |
|---|---|---|
| Rates | 10–15%+ | 6–9% (DSCR / investor) |
| Term | 6–24 months | 30 years |
| Down payment | 20–40% | 20–25% (DSCR) |
| Speed | Fast — asset-based, days | 2–3 weeks (DSCR) |
| Best for | Fix & flip, distressed property | Rental, DSCR, long-term hold |
| Credit check | Minimal | Yes (620+) |
| Points / fees | 2–5 points | 0–1 points |
When hard money makes sense
- Property is distressed and won't qualify for a conventional appraisal
- You need funding in under a week
- Short-term bridge before a refinance
- Fix and flip with a quick exit strategy
When a mortgage broker is better
- Stabilized rental property — use a DSCR loan
- Long-term buy-and-hold investor
- You have 620+ credit and 20% down
- You want a 30-year fixed rate
DSCR loans — the real alternative to hard money
Most investors searching for hard money are actually a better fit for a DSCR loan. A DSCR (Debt Service Coverage Ratio) loan qualifies on the property's rental income — not your personal income. No tax returns, no W-2s, no DTI calculation. You can close in an LLC, get a true 30-year fixed term, and pay 6–9% instead of 10–15%+.
If the property is rentable and you've got 20–25% down with a 620+ credit score, DSCR almost always wins on total cost of capital. Hard money is the right tool for distressed properties, auction purchases, and short bridges — not for long-term rental holds.
Hard money vs broker FAQs
What is a hard money loan?+
A hard money loan is short-term, asset-based financing from a private lender. Qualification is based primarily on the property's value and equity rather than the borrower's income or credit. Rates typically run 10–15%+ with 2–5 points and terms of 6–24 months — built for fix-and-flip, bridge, or distressed-property scenarios where speed matters more than cost of capital.
Is hard money cheaper than a mortgage broker?+
Almost never. Hard money is roughly 2–3x the all-in cost of a DSCR or conventional investor loan placed through a broker. Investors choose hard money for speed or to fund a property no traditional lender will touch — not for price. If the deal can wait 2–3 weeks and the property is rentable, a broker will typically save tens of thousands over the hold.
Can a mortgage broker close as fast as hard money?+
Not on a true 5–7 day timeline — hard money wins on raw speed because it skips income docs and full underwriting. A broker-placed DSCR loan typically closes in 2–3 weeks, which is fast enough for most non-auction purchases.
Do I need tax returns to use a mortgage broker?+
No. Through DSCR, bank-statement, P&L-only, and asset-depletion programs, a broker can qualify an investor with zero tax returns. DSCR is the most common route for rentals — the loan is qualified on the property's rental income, not yours.
Can I refinance a hard money loan into a long-term mortgage?+
Yes — this is the standard exit. Many investors buy with hard money to win the deal, stabilize the property, then refinance into a 30-year DSCR or conventional loan through a broker. We can pre-underwrite the takeout before you close the hard money loan so you know the exit is real.
Are hard money lenders regulated?+
Hard money for investment property generally falls outside the consumer mortgage regulations (TILA, RESPA, ATR) because it's a business-purpose loan. State licensing varies. Brokered loans — even DSCR and non-QM — sit inside a regulated framework with disclosures, licensing, and consumer protections.
Get a real quote before you pay 12%
Send us the property and we'll price DSCR, conventional investor, and (if it truly fits) a hard-money bridge — side by side.