What Is Hard Money?

Buyers still want to buy even with tarnished profiles and people still need to refinance their homes to buy another property, do home improvements, etc. Hard Money is the only option out there if they have been turned down by their favorite bank or savings and loan or mortgage broker or mortgage banker. Or all of the above!

Hard Money, also known as Private Money, is money borrowed from private individuals. Most private money lenders/investors lend money through a mortgage company (there are laws that require this).

Basically considered “all cash”, such loans are extra strong and can be used to purchase or refinance dump property, bad credit borrower, irregular income borrower, large cash out borrower, someone needing fast cash, short term Bridge loans, etc. Hard money loans are based largely on equity. The most you will get is 75% of the value of the property.

Hard Money loan qualifications are more forgiving than conventional or bank financing. The two basic qualifications are: #1. Decent existing real estate equity or at least a 25% down payment if a purchase and #2. An ability to repay the loan.

The rates are higher and it will likely cost a bit more than a 30 year fixed rate loan but it can get you the money you need if refinancing or it can fund your next dream home purchase. Many people have credit card rates that are 15% to 32% and Hard Money rates average 9% to12% with interest only payments.

I hope you found this helpful and now have a better understanding of what is a hard money loan.

Best,

Ken – One of The Guys in the White Hats

Hard Money Loan Originator at family company Sun Pacific Mortgage and Real Estate.

BRE #01464899/ NMLS #360993. Phone number (707) 523-2099. Website is www.sunpacmortgage.com.