Private Lender vs Hard Money Lender

[Account Closed]

Is there a difference between the two?

If the loan terms were the same, would you be more likely to work with a private lender or a hard money lender?

Hard money lenders use private money, so to my mind they are the same. I'm just wondering how investors perceive the two.

[Bill Gulley]

So what you really want to know is how a private money lender and a hard money lender is viewed by the public?!?!

Neither of these terms has any legal merit, "Hard Money Lender" is a term used by RE types and interchangably with a "Private Money Lender" Jon has mention the difference and IMO it goes further, that a person or member in a company may loan funds within the company entity and the would be a private source of funds or lender. Another that comes closer to any legal definition is within SEC Regs and the Safe Act when talking about family members who loan money for a mortgage or business venture as being a "private party".

I have never use the term Hard Money Lender as to me it has a negative connotation, the interest rates charged, terms and some shady types, IMO, seem to be referred to as the HM lender.

The fact that I actually fund with my money or "invested" funds or another's money is irrelevant to lending. If you are making mortgage loans you are a mortgage lender, especially if you are in the business of doing so! In court, you will be defined as a mortgage lender or a broker and not either of the terms you mentioned.

So I'd suggest you use "mortgage lender" or "mortgage broker" which is better understood by the public, in the financial arena and legal circles. Hard money lender is simply accepted slang in the industry.