A private mortgage or hard money loan is a type of mortgage loan whereby the loan is funded or sourced from another private person or business instead of borrowing from an institutional bank or another mortgage lender
These types of loans generally pose higher interest rates, loan terms between 12-24 months, do not require proof of income, require lower credit scores, have higher fees, and typically require 30-40% down payment or equity. Investors or property flippers often choose these types of loans in order to streamline the purchase or refinance process as in some cases time is of most importance.
Because there are little underwriting requirements, these types of loan can generally close in 7-10 days.
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