Hard Money Loan
A type of loan that is secured by real property. Hard money loans are typically used in real estate transactions, and the lender is generally an individual or company, not a bank.
- Example : Joe wants to build a brand new house. He obtains a hard money loan from Lou for $295,000 with an interest rate of 3% payable over the next 10 years using land as collateral. Joe builds a house on the land he purchased with this loan and later sells the new home for $695,000. Joe pays off the full balance of the hard money loan to Lou.
