What is hard money and soft money lending?
Consequently, what is the difference between soft money and hard money?
"Hard" and "soft" money Contributions made directly to a specific candidate are called hard money and those made to parties and committees are called soft money. Soft money constitutes an alternative form of financing campaigns that emerged in the last years.
Subsequently, question is, how does a hard money loan work? A hard money loan is simply a short-term loan secured by real estate. They are funded by private investors (or a fund of investors) as opposed to conventional lenders such as banks or credit unions. The terms are usually around 12 months, but the loan term can be extended to longer terms of 2-5 years.
Keeping this in consideration, what is a Soft Money Loan?
By definition, a soft money loan is a more traditional loan with a below-market interest rate. This type of loan has longer repayment periods and interest holidays. A car loan would be a good example of a soft money loan.
What Hard money means?
Hard money is a way to borrow without using traditional mortgage lenders. Loans come from individuals or investors who lend money based (for the most part) on the property you're using as collateral.