WHAT EXACTLY ARE PRIVATE MORTGAGE / HARD MONEY LOANS?
A hard money/private mortgage loan is a secured debt obligation that produces a regular, predictable income stream to the investor with all the security, protection and recourse that a mortgage lien can provide. To put it more simply, it is a short-term loan made to a real estate investor secured by the value of his/her real property as collateral for the loan. Unlike stocks or other equity investments, the security in a hard money loan is the actual bricks and mortar of the real estate, further backed by title and hazard insurance. Many private mortgage loans are also secured by personal guarantees from the borrowers, adding another layer of protection for the investor. You will hear many common terms when people discuss private mortgages: hard money loans, private notes, trust deed investing, deed of trust notes, private mortgages, etc.. They all mean the same thing – a private lender is lending money against real estate and getting a promissory note and mortgage lien against the pro
