Hard money loan is the amount of loan which is transferred from the actual private lender to the borrowerfor the intent of making a giant purchase, ordinarily for the real estate purpose. It is so-called as “Hard money loan” because of the huge transfer of money instead of the exchange of money by way of seller or lender carrying on the home. It is highly unsafe loan in the part of lenders and often comes with high interest rates. Though, hard money loan is a private loan so the terms and conditions of the loan are normally flexible.
Knowing the hard money loan:
The word hard money loan often expressed in the difficult real estate language which makes it hard to understand but actually it is a simple concept and easy to understand. It is the supply of cash loan to the borrower of the loan by the private lender. This kind of loan is not strict the guidelines of combined lending institution or by the federal and so it could be negotiable with the lender.
Person who apply for Hard Money Loan:
As we know that hard money loan is a private loan form a private lender and it is not subject to the strict guidelines as other types loans. For thy reason, hard money loan often wanted by the people who:
- Never have a credit.
- Have a record of bad credit.
- Have income which could not be verified.
- Have a home foreclosure previously
- Have the capacity to refinance immediately
- Require hard money.
Some Advantages and Disadvantages of Hard Money Loan:
Hard money loan is often risky for the lenders who lend money to the borrower because the borrowers of this loan normally have a poor credit record. This also signifies that the lender of hard money loan always in the key position to charge a high interest rates and impose fine if in case of repayment failure. In the part of borrower of this loan there is certain risk too. There is an easy availability of large amount of cash which the borrower is responsible for the terms of using the cash suitably. However, the benefit is that it is simple to qualify for the high-risk loan and the condition are slightly flexible in contrast to other loan kind. Then responsible hard loan borrower could avoid these traps but the irresponsible borrower should think first before seeking and accepting the hard money loan.