Private Money and Hard Money Loans
A hard money loan is a specific type of asset-based loan financing in which a borrower receives funds open by the value of a bundle of real estate. Hard money loans are typically issued at much higher interest rates than conventional commercial or residential property loans and are nearly never issued by a commercial bank or additional deposit institution. Hard money is similar to a join loan which ordinarily has similar criteria for lending as well as cost to the borrowers. The primary difference is that a join loan often refers to a commercial property or investment property that may be in transition and does not yet qualify for traditional financing, whereas hard money often refers to not only an asset-based loan with a high interest rate, but maybe a distressed financial situation, such as arrears on the existing mortgage, or where bankruptcy and foreclosure proceedings are occurring.
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