Hard Money Loans

Hard Money Loans

Hard money loans are a type of short-term, high-interest loan that is typically used for real estate investing. They are provided by private investors or companies, rather than traditional banks or financial institutions. Hard money loans are secured by the property being financed and are generally used for properties that do not qualify for traditional financing due to factors such as poor credit or lack of income documentation.

Hard money loans are typically used for:

• Fix-and-flip projects: financing the purchase and renovation of a property that will be sold soon after.
• Bridge financing: financing the gap between the purchase of a property and the obtaining of a permanent loan
• Construction loans: financing the construction of a property
• Cash-out refinances: obtaining cash from a property’s equity

The interest rates on hard money loans are typically higher than traditional loans, and the terms are usually shorter, often just a few months to a couple of years. Hard money loans are also less regulated than traditional loans, which means that the requirements for qualifying for a loan may be less strict. However, this also means that there is a higher risk of default and the terms and conditions of the loan may be less favorable to the borrower.

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