Understanding the Difference between Hard Money and Private Money

Many first-time borrowers struggle to understand the difference between private money and hard money. There are in fact a number of similarities between private money and hard money loans, and both can be used to fund your real estate investments. However, there are a few important factors that make private money loans a wiser choice if you have the option between the two.

First of all, private money loans are usually offered at a much lower rate than hard money loans. This is because companies that offer hard money loans usually offer them to people based primarily on the value of a property, not necessarily on the credibility of the borrower. Private money lenders are usually a bit more selective about who they lend to and are generally more interested in financial success on both the lender’s part and the borrower’s part.

Private money loan companies also present investors with the opportunity for a long-term partnership and exceptional resources. When you apply for a hard money loan, you’re essentially going to a middleman to obtain privately provided money. With an established private money lender, you’re going directly to the money, which means that you will be able to build a partnership with the company that is funding your investment.  In the house flipping industry, such partnerships, insight, and resources are invaluable and will definitely impact your bottom line.

At ZINC Financial, we are a reputable California private money lender. We are as invested in your financial successes as our own, and therefore we only work with clients that we believe in. When you obtain a private money loan from ZINC Financial, you can rest assured that your terms will be fair, your loan will be supplied to you quickly, and that ZINC will be a strong financial partner throughout your investment process. ZINC Financial never offers subprime loans and strives to be as transparent and helpful as possible for our clients. Contact us today by calling (559) 326-2509 to learn more about our rehab loans.