About Hard Money Refinancing
"Hard money" refinancing refers to a specific type of loan that is secured by real estate. This type of loan is typically taken by individuals or businesses who need to quickly get cash out of equity in a property but who cannot easily obtain a traditional loan with a bank or credit union. Lenders who offer this type of asset-backed refinancing tend to charge higher interest rates and fees than banks and generally offer lower "loan-to-value" ratios (the percentage of the property's value vs. the amount of the loan). This is due to the speed and convenience of the loan as well as to account for the higher risk associated with borrowers who have lower credit ratings. Common reasons for taking a cash-out hard money loan are buying out a business partner, purchasing equipment or working capital, or making payroll.
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