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Updated almost 7 years ago,
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Difference Between a Hard Money Loan and a Private Mortgage Loan
#1 Investor Mindset Contributor
- Lender
- The Woodlands, TX
The Difference Between a Hard Money Mortgage Loan and a Private Mortgage Loan
Sometimes used interchangeably, these two terms are not synonymous. A Hard Money Loan refers to a TYPE of loan, while a Private Mortgage Loan refers to where the money is coming from.
A Hard Money Loan is a loan based primarily on the value of an asset being put up for collateral; and only secondarily, if at all on the credit worthiness of the borrower.
A Private Money Loan is a loan where the funds are provided by private individuals, sometimes banding together in a fund, and not from institutional sources.
So a mortgage loan can be a Hard Money Loan but not a Private Mortgage Loan; it can be a Private Mortgage Loan but not a Hard Money Loan, it can be neither or it can be both.
Hope this clarifies it.
- Don Konipol
