1. Short-Term Loans – Bridge Loans and Hard Money Loans are typically used over short periods of time, usually taking a few months to years.
2. Higher Interest Rates – Both of them have higher interest rates compared to traditional loans, due to short-term use and higher risk profile.
3. Secured Loans – Bridge Loans and Hard Money Loans are secured by collateral such as commercial real estate properties.
And here are some of the differences between a Bridge Loan and a Hard Money Loan:
1, Purpose – Hard Money loans are often used by real estate investors who need to acquire commercial real estate quickly for those who are not qualified for traditional loans and it is easier to obtain. In contrast, Bridge loans are often used to fill a gap to finance a long-term project.
2. Lenders – Bridge Loans are often issued by banks or traditional lenders, while Hard Money Loans are usually issued by private lenders.
3. Underwriting – Bridge Loans are often required to go through underwriting and documentation, while Hard Money lenders often check the value of the collateral rather than the borrower’s creditworthiness.
4. Repayment – Hard Money loans required to have a balloon payment at the end of the loan, while Bridge loans have more flexible repayment terms. But some Hard Money lenders also have flexible repayment terms.
Overall, Hard Money loans and Bridge loans can be useful financing tools for certain situations, it’s always important to know the difference between these two and always choose the right tool that’s fit for your needs. That’s why it’s very important to discuss it with a private lender if you plan to acquire a real estate property quickly and discuss the repayment terms.
It’s always best to consult with a lender that specializes in commercial real estate lending. With the fast closing rate of as long as 2 weeks and you can get your funds in just 48 hours! Century Capital will definitely be here to provide you with the best services. To know everything about Century Capital Reach Victor Cohen at 201-880-7850 ext 102 or send an email to victor@centurycapitalfinance.com.
