Two Types Of Insurance You Need For A Hard Money Loan

When purchasing an investment property and want your loan to close fast you will need two types of insurance, hazard insurance and title insurance.  In the video below I explain.

Video Transcript

So you’re getting a private money loan to purchase a property. You need two types of insurance.  What are they? OK. Pretty simple, title insurance and hazard insurance.

What is title insurance?
You’re going to need title insurance for yourself when you’re buying a property. But a lender is also going to want that. And that is going to insure the title against any kind of conflicts that may arise in the future on the title to that property. So that’s the first type of insurance you want when you’re getting a private money hard money loan.

Hazard Insurance
The second type of insurance is going to be hazard insurance. You’ve put all of this money into this property. It’s your baby you’ve put your life savings into it maybe or someone else’s life savings make sure it’s insured. And that is not going to be the same as a homeowner’s insurance policy. OK that you’re getting on your home that you’re going to live in. That’s overkill for an investment property. All you need is a basic hazard insurance policy in place to get your private money loan.

OK. So let’s recap. Two types of insurance you need to get a private money loan, title insurance and hazard insurance.

2 thoughts on “Two Types Of Insurance You Need For A Hard Money Loan

  1. If a private individual loans money to another person who wants
    to purchase a house…….Can the person loaning the money get
    Mortgage Insurance to protect their investment? If so, what companies
    Would offer that in the Central Valley.
    Thank you so much for your assistance.

  2. Question looking for a hard money loan for investment private lender is asking for upfront loan insurance payment of about 10%. Is this a scam?

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Corey Curwick Dutton, MBA Park City, Utah

About the author

Corey Curwick Dutton, MBA Park City, Utah - 2005 MBA Graduate with 10 years experience in Business Management including International Management. Corey is a Private Money Lender and Loan Officer. In her spare time Corey enjoys writing on topics in the private money lending industry. She also enjoys hobbies such as mountain biking and skiing in the great outdoors of Utah.