PMF Partners Insights
What’s the Difference Hard Money or Private Loan?
Originally published in 2018. Specific interest rates, loan sizes, and program details have likely changed since. For current terms, please contact PMF Partners.
The Difference Between a Hard Money Mortgage Loan and a Private Mortgage Loan
Sometimes used interchangeably, these two terms are not synonymous. A Hard Money Loan refers to a TYPE of loan, while a Private Mortgage Loan refers to where the money is coming from.
A Hard Money Loan is a loan based primarily on the value of an asset being put up for collateral; and only secondarily, if at all on the credit worthiness of the borrower.
A Private Money Loan is a loan where the funds are provided by private individuals, sometimes banding together in a fund, and not from institutional sources.
So a mortgage loan can be a Hard Money Loan but not a Private Mortgage Loan; it can be a Private Mortgage Loan but not a Hard Money Loan, it can be neither or it can be both.
Hope this clarifies it.
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