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Tough alternatives bring us this week’s Marketplace Money Buzzword: hard money mortgage.
Hard money mortgages are loans funded not by banks, but by private groups. Usually, they’re used by people who have no other options.
But this option comes at a price: fees and interest rates are higher than with traditional loans.
And hard money lenders don’t care about your credit history; they just want to make sure you’re buying a valuable property because they foreclose sooner than banks do and they want to make sure they get their money back.
With subprimes all but dried up, many are turning to hard money loans and that’s a hard choice.
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