Why Moving Fast with a Higher Interest Rate Can Be Smarter Than Waiting for a Better Deal
When Speed Beats the Rate: A Real-World Case Study
Most people would never imagine agreeing to a mortgage loan with a 14% interest rate and three points. It sounds outrageous at first. But what if I told you someone did—and it was the smartest financial move they made this year?
Let me explain.
A recent client came across a commercial property valued at $1.2 million. Due to a distressed situation, it was available for just $600,000—a rare 50% below-market opportunity. Now, in a hot market like this, hesitation is expensive. He needed to move fast.
Traditional lenders? Too slow.
Banks? Too many hoops to jump through.
Investors? By the time he got one on board, the property would be gone.
So he turned to a hard money loan.
What Is a Hard Money Loan and When Should You Use One?
Hard money loans are short-term, asset-based financing typically used by real estate investors. They focus more on the value of the property being purchased than on the borrower's credit or income.
Benefits of Hard Money Loans
Speed: Loans can close in a matter of days, not weeks or months.
Asset-Based: Approval is based on the property's value, not your W-2 or credit score.
Flexible Terms: They accommodate unique investment opportunities that traditional banks won't touch.
When to Use a Hard Money Loan
You find a property well below market value and need to close quickly.
You plan to refinance or flip the property in a short time frame.
You have non-traditional income that banks may not recognize.
You’re buying distressed, auction, or off-market properties.
In our client's case, the hard money loan was his bridge. Yes, it came at a high cost—14% interest and three points up front—but it bought him the deal. Now, we're already working on refinancing it into a lower-rate product.
Why Waiting for Lower Rates Can Cost You More
People tend to obsess over interest rates. But what they don’t always calculate is the opportunity cost of waiting:
Lost Deals: Good properties get snapped up fast.
Rising Prices: Property values are still increasing in many markets.
Competition: Other cash or private money buyers won't wait.
Missed Cash Flow: Waiting means delaying potential rental income or appreciation.
Instead of waiting for rates to drop, smart investors adapt their financing strategy to secure the deal now.
How Non-QM and DSCR Loans Can Help You Refinance
Once you secure the property, that’s when Non-QM Loans or DSCR Loans come in. These types of mortgages offer flexibility to refinance out of a high-cost hard money loan.
Non-QM Loans work great for self-employed borrowers or those with complex financials.
DSCR Loans are perfect for rental properties, where the loan approval is based on the property’s cash flow, not your personal income.
These loans are not tied to traditional underwriting rules. That’s why they’re ideal for investors ready to act fast, but still want to optimize long-term financing later.
Final Thoughts: Be the Investor Who Moves, Not Waits
My client didn’t hesitate. He understood the numbers, saw the value, and moved quickly. The result? He now owns a $1.2 million property with built-in equity and long-term upside.
You can do the same. Let the smart financing tools—hard money, DSCR, and Non-QM loans—work in your favor.
📞 Ready to Make a Move?
Call me: 619-586-9597
Visit us: www.mortgagetoinvest.com
Email: [email protected]
Get a quote: Click here
📚 Additional Resources
If you're serious about building wealth through real estate, here are a few valuable resources to expand your knowledge:
✅ External Links:
Investopedia – Hard Money Loan: Definition, Uses, and Pros & Cons
This article provides a comprehensive overview of hard money loans, detailing their structure, advantages, disadvantages, and typical use cases in real estate investing.
🔗 https://www.investopedia.com/terms/h/hard_money_loan.asp
Forbes – How To Leverage DSCR Loans To Start Or Expand Investments
This piece discusses how real estate investors can utilize DSCR loans to finance rental properties, highlighting the benefits and considerations of this financing option.
🔗 https://www.forbes.com/councils/forbesbusinesscouncil/2025/04/04/how-to-leverage-dscr-loans-to-start-or-expand-investments/
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