Hard money loans are typically arranged by brokers and normally are based on the equity of the property involved. Many times the lender doesn't even do a credit check. Hard money loans are expensive, brokers charge several points and the interest rate is much higher than prime. Hard money loans also are short in duration, no more than a year.

I have another lens up if you would like more information on hard money loans.

Private money loans are preferable to hard money in almost all cases.

Private mortgage lenders are investors who want a good solid return on their investment. Real estate is one of the safest assets in the world so the value of the property is what the lender will base the loan amount on.

Private money loans usually have an above average interest rate. However, brokers are not normally involved in the transactions so points are unusual.

Private lenders are not as stringent as banks but most of the time they will at least check your credit, even if they don't base their decision solely on your credit score.

Private lenders can work much faster than banks because they do not need to meet with a loan committee to decide which loans to fund.

Private investors don't want to churn loans the way hard money brokers do. Most private lenders are content to earn a higher rate of return than they would get by putting their money in a bank. So while hard money loans are granted for short durations, private loans are often amortized for 10, 15, or 30 years just like a bank mortgage.

Anyone who has money to invest can become a private money lender. Private mortgages are not completely risk free.

Whether you become the lender or if you just choose to get your mortgage with a private lender, banks would rather you were still in the dark about private mortgages. Bankers do not want you to know about private mortgages because you are now competition for their most profitable product.

Private lenders are not bound by the same red tape, time frame, policies, rules, or traditions of banks and other lending institutions.

Private lenders get the perks of mortgage investing without the hassle of stringent regulation.

The biggest hassle of being a landlord is dealing with tenants and their 3 AM calls about plugged toilets.

Private mortgage loans allow investors to have the security of real estate while side stepping the major problems faced by landlords.

It takes a special type of person to be a landlord. Not everyone has the personality to be a property manager.

I owned rental property and hated dealing with tenants.

Not all private mortgages are for rental properties. Many real estate flippers use private mortgage loans because of the speed involved. Not having to jump through red tape and wait on loan committee approval is a HUGE plus for real estate investors. They will gladly pay a higher interest rate to gain the speed they need to lock in deals.

If a real estate flipper needs $50,000 in 3 days to buy a house before it is foreclosed on he/she will gladly pay 15% interest to a private lender so that they can get the deal.

I am currently working on an ebook to explain how to profit with private mortgages. I am also working on a membership site that will bring people interested in getting a private mortgage together with people who are either current private lenders or people who are interested in becoming a private lender.

I have already purchased the domains for these sites. You can bookmark this site as I will update this section as soon as the domains are live or you can write down the URLs and check them later. I hope to have both sites live by the end of 2008.

PrivateMortgageProfits.com

PrivateMoneyClub.com
OR
PrivateMortgageClub.com

Not sure which domain I will use for the membership site.