What is hard money?

Hard money is a term thrown around by real estate agents more and more these days. However, those that are not in the industry may not understand what it means. What is hard money? Quite simply, it is money from a private lender that provides funding based on the property you want to buy – not your credit score. These types of loans typically carry a higher interest rate than average. There are also typically higher application fees.

Who Needs a Hard Money Loan?

Hard money loans can be accessed quite easily if you qualify. They eliminate a lot of stringent requirements found with other types of lending. This alternative source of lending is great for those that are capable of affording a home, but are unable to secure a traditional mortgage.

Hard money loans are typically ideal for those who do not plan on owning the home for a long time. Those who like to purchase homes, improve them, and sell them for a profit regularly utilize hard money loans. This has led to a market for hard money Arizona and other states that currently have a buyers real estate market. Due to their high interest rate, hard money loans are not well suited for those who intend to own their home for a long period of time. However, bear in mind that you can purchase a home with hard money and then find an alternative source of financing at a later date.

What Are The Qualifications?

The qualifications can vary dramatically depending on the lender. As hard money loans come from private lenders and investors, they are able to set their own criteria. They may use income, credit score and other familiar lending criteria to determine if you are eligible for this type of financing. However, the majority of hard money lenders in Arizona and other similar states will use the real estate value of the home. Unlike traditional mortgages, hard loans will only finance 65% to 75% of the home’s value – and that is in the best-case scenario. This means that it will be difficult to purchase a home solely with a hard money loan; you will require another source of financing. However, this type of loan will be able to cover the majority of the home payment.

Hard money loans are an excellent alternative source of financing for those who wish to purchase real estate. Since they do not typically rely on your credit score, this is a great source of financing for the investor or owner with an unfortunate credit score.


  1. What makes money backed by either Gold, Silver, or another Commodity inferior to fiat? Everything I’ve read makes it seem like the reverse is true.
    I always get the arguement that Sound Money is “inferior” without a sound arguement.

  2. I have already purchased a fixer upper house for pretty cheap..I now need the money to rehab the property….

  3. I assume there are no countries without fiat paper money today. What was the last nation to use commodity (ie real) money for its national currency?

  4. Im planing on purchasing a short sale using a hard money loan …then using rental income only to qualify for a conventional loan …rental income is double the PITI
    (Self-sufficiency) Does anyone have expirience in this scenario….I cant use my job to qualify…

  5. Are there any rules on what the maximum rate I can charge is, and is there anything I need to apply for to become a lender in New Jersey?

  6. Hi,
    In my US history class we’re learning about the Gilded Age (aka 1870’s to the 1900’s). What is the difference between hard money, soft money, and greenbacks? Also as a side question, any definition of the Tweed Ring would be greatly appreciated!

  7. A complete formal list would be great. I want to be prepared to answer their questions when I propose this loan request.

  8. I need a very fast hard money bridge loan and have $500k equity spread over 3 properties. What would be the best way to structure a request to obtain a quick hard money loan, terms that would help obtain it, and what is a good source or place to advertise for this?

  9. I have heard that if you have 40%-50% of the cost of the home that you can just get a hard money loan if you don’t have credit but I have also heard that its better to try to get a sub prime lender(if they still exist) how long would they give me to pay off the loan? 20 years like a normal mortgage or less?
    My credit is not horrible, I think its just nonexistent. I have lived outside the country for the last 6 years.

  10. recently saw a house i like but asking for hard money loan or cash..does anyone know about obtaining one,how long you have to pay back and what rates are?

  11. I was wondering if I need a license to become a hard money lender in the state of Florida? I want to specialize in Owner Occupied Residential. What other requirements/regulations are there to lend hard money? I can’t find any more information online, everything is just ads or listings of Hard Money Lenders in the State of Florida.

  12. I’m an investor. A friend in my network became a successful hard money lender by using forced savings to take all the rental income from his properties and pay off his loans so his properties had lots of equity in them. Then he sold them eventually and has been running a successful hard money business in florida. I live in California.

    What’s your experience?

  13. I’m concerned that he, and the rest of the Dems in government, may not spend enough of my hard earned money, and I may have to spend some of it myself. That’s too much of a responsibility for me to handle. I need to make sure that they spend any and all of my disposable income before I get a chance to. What can I do?

  14. I have a hard money loan against my dads commerical property under my name and I cannot afford it anymore …do you think I can do a bk on the hard money ? thats a lien against my dads commerical property ?

  15. Whenever I hear a report on the news about a food that is linked to a widespread infection like e coli or contaminated with chemicals, the reporter always suggests “throw the bad food away”. Am I alone in thinking that’s BS if we spend our hard money on food with the intent on being able to consume that food? Why are consumers not being refunded their money? Where is the incentive to prevent these occurrences from happening if there are no repercussions set in place?

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