Posted by Ed Garcia on October 15, 2003 at 09:44:56:
Briana,
HARD MONEY
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). (See definition of “underwriting” below.)
Briana, this definition has been taken from ?Glossary Of Common Terms Used In Loans And Lending? By Ed Wachsman, in the ?How-To Article? section of this site. I?d like to suggest for you to visit this portion of the site, as well as the ?Success Stories?. I?m sure you will find it beneficial.
Ed Garcia