There are many types of loans available, everything from student loans to business loans, and then there is something known as hard money loans. These loans can be used for a number of financial reasons, but hard money loans stand out due to how they are acquired. Unlike most loans, which are given by the bank, hard money loans tend to come from private money lenders (also known as hard money lenders), who can be anyone from a family friend to a private lender who specializes in these types of loans. Hard money loans can be used for a number of purposes and this article will take a look at a few of them.
- Privately Funded Mortgage: One use for a hard money loan is that it can be used to help with a privately funded mortgage. As the name implies, a privately funded mortgage is set up between two individuals, and not, as is common, between an individual and the bank. Mortgage payments are still made, but they are sent to a private individual instead of a regular financial institution.
- Used to Buy and ‘Flip’ a House: Another use for a hard money loan is to be used to buy and ‘flip’ a house. House flipping is when a slightly run-down house is bought rather cheaply, fixed up and renovated, and then sold for a profit. Hard money loans are ideal for this type of project since they already have a relatively short loan period, and house flipping projects are meant to be short-term projects.
- Used for Short Building Projects: And finally, a third use for a hard money loan is it can be used for short building projects. Similar to using the loan to buy a house for ‘flipping,’ a hard money loan can also be used to finance short construction projects, allowing the building to be built without having to go through a bank to get the money necessary to fund the project.
In conclusion, there are several uses for hard money loans. These uses include providing finances for privately funded mortgages, being used to buy and ‘flip’ a house, and being used to fund short building projects. These are just a few of the ways someone can use a hard money loan, as they can be used to fund a number of things.