About Hard Money Loans
A private money or "hard money" loan is a loan made to an investor or other individual using real estate as collateral. Typically, the lender in these scenarios is an individual or private lending company as opposed to a bank or credit union and the borrower is most commonly a real estate investor who needs cash to purchase or rehab a property. Hard money loans are usually taken by borrowers who have been denied a loan by a traditional lending institution or who need to close a transaction more quickly than a bank will allow. For this reason, the rates and fees associated with such a loan tend to be higher than for a conventional mortgage. Additionally, hard money lenders may require the borrower to bring a significant amount of cash or equity to the closing in order to protect their interest in the event of a default.
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