How Does A Hard Money Loan Differ From A Conventional Mortgage
                     How Does A Hard Money 
Loan Differ From A 
Conventional Mortgage
Are you looking to 
invest in real estate and 
need financing? You 
probably have two 
options before you! One 
of them is a 
conventional mortgage 
and the other one Is a 
hard money loan. Most 
people know the basics 
of a conventional 
mortgage. But many 
people wonder about 
hard money loans! Let’s 
look at some common 
differences between the 
two types of loans.
Funding source
Conventional loans are funded by conventional lenders such as larger banks 
or other investors. They offer loans against security. Most lenders who 
finance hard money loans are private ones. The funding may come from 
private investors, credit lines, or different kinds of investment funds. 
Normally, no one is sold a hard money loan. It is offered against collateral 
security.
Time Frame
One of the biggest differences between a hard money loan and a 
conventional mortgage is how long it takes for approval & disbursement. 
With a conventional mortgage, it usually takes several weeks or even 
months to close. You can typically close with real money in a week or less. It 
is crucial when you are buying from someone who wants to close quickly.
Interest Rate
The rate of interest on hard money loans is higher than on conventional 
loans or mortgage loans offered by banking institutions. Professional hard 
money lenders offer it for short periods. It may not exceed 1 year. 
Depending on the circumstances, it may be prolonged. They will collect 
large amounts of small interest payments over time. Hard money interest 
rates are also higher because the majority of the properties financed are 
distressed.
Property Type
Conventional lenders offering mortgage loans prefer residential 
properties as well as rental properties. The borrower’s creditworthiness is 
given more weight by these lenders. Additionally, they monitor the state 
of the underlying assets. A typical mortgage cannot be approved for 
distressed properties.
Both commercial and residential assets are financed by hard money 
lenders. But it is not approved on owner-occupied properties or 
properties being used for personal or household use. Hard money loans 
are designed for distressed properties and are used for flipping or 
refinancing and keep as a rental.
Loan Term
Most conventional mortgages have interest rates that are fixed for 30 
years and are fully amortized. Hard money loans are interest-only and 
typically have a term of 1 year or less.
If you are wondering how to get a hard money loan in San Diego, 
All California Lending is here to help. They will answer your hard 
money lending questions. They are one of the most respected names for 
hard money loans in San Diego. They love to share their expertise 
with you, so contact them today!
Thanks!
Any questions?
You can find me at
× www.acalending.com
× [email protected]