Hard Money is a loan secured by the value of a real estate property, they are generally more expensive than traditional sub-prime mortgages. However all mortgage loans are not necessarily considered to be a high cost mortgage. Generally a hard money loan carries additional risk that a borrower is aware of. Rather than selling the property a borrower will opt to keep the loan and if a lender is willing to assume some of the risk by offering a hard money loan. The rate is not dependent on the Bank Rate. It is instead more dependent on the real estate market and availability of hard money credit. If a borrower defaults the default rate may be as high as25% to 29% and Prepayment Penalty may be imposed on riskier loans. Points usually are around 4 to 15 depending on risk and LTV ratio and typically hovers between 60 and 70% of the market value of the property. Commercial hard money is similar to traditional hard money, but may sometimes be more expensive as the risk is higher on investment property or non-owner occupied properties. Commercial hard money loans are often short term and therefore interchangeably referred to as bridge loans or bridge financing. Commercial Hard Money Loans may not be subject to the same consumer loan safeguards as a residential mortgage may be in the state the mortgage is issued.