Are Hard Money Loans a Good Choice?

Hard money loans are often used by developers and flippers who need a short-term influx of cash for an investment. Shutterstock

You’ve decided to go into the house-flipping business, or maybe you are facing foreclosure on your home and need help. You may think these two items don’t go together, but they can be financed in the same way.

A hard money loan can be used in both scenarios. But what is it, and how do you go about taking out a hard money loan?

How a Hard Money Loan Works

Hard money loans are often used by developers and flippers who need a short-term influx of cash for an investment. Those with high home equity, but are about to be foreclosed on, may also use a hard money loan.