Home loans come in a number of different forms. One option for those looking to buy real estate is hard money lending.

Hard money lending is just one of the many lending choices available on the market today and like any of the others out there, has its own unique advantages and drawbacks. Those in need of a real estate loan should consider hard money lending as a viable option.

Hard money lending, sometimes called asset-based lending by real estate professionals, involves the writing of short-term loans with high interest rates and limited standards for underwriting. Hard money lending is offers used for the rehabilitation and restoration or blighted homes and properties, sometime for the eventual resale on the market. In general, credit matters less than the value of the home in question. Ultimately, hard money lending is a vital tool in the restoration of blighted homes and properties. Blighted homes can lower the value of neighboring homes, thus hard money lending is crucial in raising the value of not only the home involved, but sometimes in entire neighborhoods.

In general, hard money loans last for six to 12 months. Interest rates are typically higher compared to other types of loans. Hard money lenders attempt to profit from the higher resale value of homes repaired using hard money loans. They are a vital aspect in the restoring of blighted homes and are useful for both lenders, home owners and neighbors alike.

As with any type of home or real estate loan, hard money lending has its own unique advantages and disadvantages. Lenders who are smart with their investments can make a solid profit with the sales from homes rehabilitated with hard money lending, and the homeowners themselves and their neighbors can benefit financially as well. However, lenders and investors also carry increased risk due to the blighted nature of the properties involved.

Overall, hard money lending, when done smartly, can increase the value of homes and generate stronger real estate values. It is an important aspect of real estate that shouldn’t be overlooked by lenders, investors or homeowners.