Let's Define Hard Money!!

[Riaz Gillani]

BP Com,

If you're like me - you are fed up with the stigma surrounding hard money. The notion that they have absorbingly high rates and low LTV feel outdated.

Are you at 3 and 1? No...but I think the notion that it'll empty your pockets stems from a lack of a concrete definition. I'm wondering what your definition of Hard Money Lending is.

Here's mine:

Hard Money Lending - The practice of offering a loan, by a non-bank institution, wherein the focus is on the collateral rather than the worthiness of the borrower. At the expense of a higher rate, the borrower seeks to benefit from the shortened approval process and 'exit' freedom...

Looking forward to hearing yours...

[Will Barnard]

Hard money is a licensed professional lender who lends other people's money via a fund (and perhaps their own) to borrowers who qualify. They typically charge points, higher interest rates and typically require appraisals (at cost to borrower). Many hard money lenders do look at credit score of borrower and history of RE investments to help mitigate their risk. While many of them underwrite the investment as the first priority, credit still comes into play (which could affect down payment, interest rate, and points).