Hard money comes in many flavors; one of the most common is mortgages. Using the owner's equity in real

estate, hard money lenders generally lend 65% - 70% of the value of real estate property. In general, hard

money mortgages are used for commercial purposes. However, they can also be applied to residential

properties. In this instance, the loan is generally referred to by its more genteel name: a non-conforming

mortgage.

Lending criteria for hard money mortgages are fairly simple. The loan is based on the value of the ‘subject

property' - either real estate owned or about to be purchased by a borrower. If the borrower is buying property,

the "value" of the real estate is defined as the actual purchase price of the property. If the borrower needs hard

money for a refinance situation, the ‘value' is determined by a written real estate appraisal.

If you are looking for a hard money refinance loan, the lender will want to know when you purchased the

property and what you paid for it. If you bought a property a month ago for a specific sum, the lender will be

disinclined to lend you more than that purchase price. Once you own the property for about a year, especially if

you have put some money, sweat equity, or both into the property, you can get a new appraisal and get a loan

based on the new, improved value of the property. This is called ‘seasoning.' Be sure you have seasoned your

property before going out for a refinance mortgage at a significantly higher value figure than what you paid for

it.