Hard money loans are a type of financing that is secured by real estate, typically used as a short-term loan for flipping houses or rehabilitating properties. These loans are often characterized by higher interest rates and shorter repayment periods than traditional mortgages.
The purpose of hard money loans is to provide financing for real estate investments or business ventures that may not qualify for traditional financing from banks or other financial institutions. Hard money lenders may be more willing to lend to borrowers who have less-than-perfect credit or who are self-employed, as they are primarily concerned with the value of the collateral being used to secure the loan.
Hard money loans can be a useful source of funding for individuals or businesses looking to make a quick real estate investment or to finance the purchase or renovation of a property. However, it's important to note that hard money loans can be more expensive than traditional financing options and may not be suitable for everyone. It's always a good idea to carefully consider your options and weigh the pros and cons before committing to a hard money loan.