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What is the difference between hard money and private money lenders?

Short answerHard money lenders are businesses that lend their own or pooled capital on asset-based terms with standardized rates, points, and processes. Private money usually means an individual, like a friend or family member, lending on negotiated personal terms. Hard money is more professional and repeatable; private money can be cheaper but depends entirely on the relationship.
Reviewed by Juan Fernando Romero, NMLS 2557318Updated

The details

Hard money loans typically charge 2 to 4 points upfront with double-digit rates for 6 to 24 month terms.

Always document private money loans with a proper note and lien; handshake deals create legal and tax problems.

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