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| Home » Types of Mortgage Loans » Hard money loan |
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Hard money loan |
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A hard money loan is one of the most renowned types of mortgage loans that has received widespread popularity as a distinct type of financing in which a borrower receives funds based on the value of a specific parcel of real estate. Hard money loans are typically issued at a higher interest rates than conventional commercial or residential property loans and are seldom never by a commercial bank or any other sort of financial institution. In many ways, a hard money loan bears resemblance with a bridge loan as both of them have more or less similar criteria for lending as well as cost to the borrowers.
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The basic difference between a hard money loan and a bridge loan is that a bridge loan mostly refers to a commercial property or investment property that may be in transition and may not yet be qualifying for a traditional financing and a hard money loan primarily refers not only to an asset-based loan with a high interest rate but can also signify a troubled financial situation.
If someone is genuinely interested in getting a complete Mortgage Overview then it is extremely important for that person to have proper knowledge about the concept of hard money and the term hard money is primarily used almost exclusively in the United States and Canada where these types of loans are most prevalent. Hard money loan in commercial real estate are considered as a alternative "last resort" for property owners who are seeking capital against the value of their holdings. To put it simply a hard money loan is a species of real estate loan that is collateralized against the quick-sale value of the property for which the loan is made.
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