Hard money loans will typically have lower LTV'S and higher interest rates then standard mortgage programs. If you have a large down payment or lots of equity in your home then this may be your only option if you have very poor credit.

One slight down side to having a private or hard money loan on your property is this. Since private individuals or entities normally make these loans, they do not report to the major credit bureaus. This means that even though you are making your mortgage payments on time, it does nothing to improve your credit score. Additionally, when you go to refinance out of the private money loan it becomes difficult to establish your mortgage payment history. The new lender will require that the history be documented.

Hard money loans should be very carefully considered before entering into one. These are usually very high risk loans and can have severe consequences if you are late on your monthly mortgage payment. Weigh all options before entering into a contract for a hard money loan and make sure you are completely aware of all guidelines and terms of the loan before signing the closing paperwork.

Hard Money

Private Money used for loans that do not qualify for traditional loan programs.

If you are facing foreclosure a private money loan can help you get a fresh start. Pay your private mortgage on time for one year and you will be able to refinance into a much lower rate loan. During this time, it is important to clean up your credit and remove negative items from your report.