The difference between lenders

The difference between private money and hard money is in risk and the rate.

A hard money lender is usually a company that will lend on properties that are non-conforming and/or to borrowers with poor credit; ones that are turned down by institutional lenders. These loans are naturally more risky, so they will charge higher rates and points than a bank and it will be for a short period of time and will want a lower loan-to-value ratio.

A typical deal would be: 4 - 8 points, at a rate from 12 - 20%, usually interest only, although some will want it to be amortizing, and the loan will be due any where from a few months to several years. Their typical loan-to-value will be 60% or less. This gives them more security.

A private lender is usually an individual. They may also be a hard money lender, or they may be more in line with the terms and rates of an institutional lender, but typically their money will be more expensive than a bank, but quite a bit less than a hard money lender. The borrowers will be a lot more qualified that a hard money borrower, but could still be less than a prime borrower.

I hope this helps. If I didn't explain it to your satisfaction, please feel free to send me a PM and I will get deeper into it.

Good luck.