- Conventional Mortgages
Conventional mortgages, for those not familiar, are loans not offered by the government (e.g. the Federal Housing Administrations, the U.S. Department of Veteran affairs, or the USDA Rural Housing Service). These loans, instead, come from private financial institutions (e.g. banks, credit unions)
- Hard Money Lenders
Hard money loans are short-term loans typically used by residential developers whose aim is to renovate/develop a property, quickly, and sell it.
The term “hard money lending” is actually a misnomer; it doesn’t refer to how difficult it is to apply for; it refers to firmer financing terms when compared to other types of lending.
- Private Money Lenders
The term private money lenders is sometimes used interchangeably with hard money lenders.(Both are forms of financing outside the more traditional realm of a financial institution.)
The key difference is that private lenders are not “professional lenders.” They are not affiliated with any lending company. Private lenders are usually people, within your network, who have extra money and want a good ROI on their money.