Hard Money Loan

Quick Summary

An asset-based loan (often real estate-secured) focused more on collateral than income.

ELI5 Explanation

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It’s a fast loan backed by property, but usually costs more.

Detailed Explanation

“Hard money” is a common term for private lending, especially in the US, where approval is driven by property value and exit strategy. In Canada it overlaps with private mortgages and bridge loans: higher rates and fees, shorter terms, and a strong focus on LTV and resale/refinance plan.

Example

An investor uses a hard money-style loan for a quick purchase and refinances to a cheaper lender after renovations.

Why It Matters

It can solve time-sensitive deals, but it requires a realistic exit to avoid expensive extensions or default.