Bridge of Hard Money
This term is synonomous, and is also referred to as Private Money. This is a short-term, asset-based loan provided by private investors, not traditional banks, to bridge a temporary financing gap, often for real estate transactions like purchasing a property before securing a permanent mortgage or rehabilitating a property that wouldn't qualify for conventional bank financing. These loans are secured by the real estate asset itself and have higher interest rates and fees due to increased lender risk, but offer faster funding and flexible terms, requiring a clear exit strategy for repayment. . more...
Construction
A construction loan is a short-term loan designed to finance the building or renovation of a residential or commercial property. Lenders typically offer 65% to 70% of the current value, plus a portion of the construction or renovation costs—sometimes up to 100%. However, the total loan-to-cost ratio generally does not exceed 85%. Once the renovation budget is approved, some lenders charge interest on the entire loan amount from the start, while others only charge interest as funds are drawn. more...
