Hard Money Loan

A Hard Money Loan is a type of short-term lending primarily based on the value of the property being purchased, rather than the borrower's creditworthiness. Often used in real estate investing, these loans are typically funded by private investors or companies, rather than traditional banks or credit unions. Hard money loans provide quick funding, often within days, which can be advantageous in competitive real estate markets.

While they typically come with higher interest rates and origination fees, their speedy approval process and flexibility in terms can make them an appealing choice for real estate investors, especially those looking to finance projects like fix-and-flips or developments. The value of the real estate itself is the key factor in a hard money loan, serving as the collateral in case the borrower defaults.