How Do Mortgage and Hard Money Lenders Differ?

We’ve talked a lot about why you may want to go with a hard money lender versus a traditional mortgage lender, but we’ve yet to go into details. How do these two types of lenders differ and why would you want to choose one over the other? Let’s explore some of the fundamental differences.

The source of funds. A standard mortgage is funded by a lender who sells the loans to an investor or a bank. In contrast, hard money loans are largely funded by private lenders. The funds may be provided by investors, investment funds, or lines of credit. In the majority of cases, hard money loans are not sold to anyone, remaining with the original lender throughout the duration of the loan until it is paid off.

The amount of time. The amount of time it takes to close is a major difference between a mortgage and hard money lender. With a mortgage, the loan can take several several weeks to close while a hard money loan can often close within the span of a week, sometimes even less than that. When dealing with a seller that wants to close within a short amount of time, this can be a major factor.

The types of properties. Conventional mortgage lenders will usually lend on properties that are residential or rental and meant for personal use. A strong emphasis is places on how creditworthy the borrower is and what kind of condition the asset is in. Hard money lenders will lend for both residential and commercial properties and some of them don’t even take creditworthiness into consideration.

This update is brought to you by Michael Internoscia, Principal Broker and CEO of hard money lenders Florida company M & M Private Lending Group. We have over three decades of experience specializing in private money real estate loans and we pride ourselves on providing our esteemed clients a service that’s personalized while delivering low rates and closing costs. We also offer mortgage note investments and have worked extensively with brokers and affiliates. Call 305-363-7169 or 954-445-4434 to speak with a lending representative about our Florida private loans or visit our website at to fill out an application form.