Hard money mortgages have been a hot topic recently. Critics claim that hard money loans are irresponsible, while proponents say these mortgages help homeowners in difficult situations.

But, what exactly is a hard money mortgage? And why are so many borrowers interested lately? Basically, a hard money mortgage is a home loan funded directly by an individual investor or group of investors rather than a traditional lender.

Hard money mortgages are often available to borrowers who don’t qualify for traditional loans because of poor credit, short employment histories, or difficult-to-prove income. In order to qualify, investors require that the borrower bring a large down payment to the table. That way, the homeowner has some stake in the loan even though he does not necessarily have the best financial past.

Hard money mortgages are popular with homeowners who need time to improve their credit but want to buy a property now. These loans tend to have very high interest rates, so borrowers usually refinance within a few years.

To learn more see: Hard Money Mortgage Guide

Tags | bad credit loans, hard money, limited documentation loans