Hi Everyone,
I have been reading this board for information purposes for nearly a year now.
Let’s me say thanks to everyone for all their helpful advise.
I have a question, sometimes the words are used interchangable, but others have said they are not the same.
Can someone tell me the difference between Hard money and private money?
Thanks,
UZY
UZY,
Hard Money Loan - A loan that is underwritten with the condition and value of the property as the primary criteria for approval. Secondary issues may include the credit of the borrower, the ability of the borrower to repay the loan and/or the ability of the borrower to manage the property or successfully complete a rehab and sell the property. Owner occupancy, debt ratios and other issues are seldom a factor. Appraisals rather than purchase prices are used to determine value. Cash out purchases are often allowed and are another key benefit. These loans are usually approved within days and are often funded in two weeks or under with times as short as two or three days not uncommon. The cost for the benefits of speed of funding, lax underwriting and other advantages is typically a moderately high interest rate (usually low to mid teens) and high points (usually 5 to 10).
Private Money is generally from an individual investor and may not require the need for underwritingand/or requirements that are used in the Hard Money process. These loans are much harder to find as you “need to know someone”