Tips for Selecting a Hard Money Lender
Hard money loans are mostly used to fund transactions when a sudden turnaround is necessary, for example, a fix-and-flip purchase. Hard money loans allow quicker turnaround due to less bureaucracy. While hard money loans suit commercial and residential properties, you should not take loans involving owner-occupied residences. There are many hard money lenders and you should use the below tips in order to select the best.
Know what you want with the hard money loan you get. Do not hurry to take a hard money loan while you have not conducted a comprehensive assessment of your needs. A number of hard money lenders only deals with foreclosure rescues, or commercial properties, or investor financing. In addition to narrowing down your search to the appropriate bridge loan alternatives, knowing your needs also ensures you get those with professionalism in hard money lending.
Make sure you settle for a nearby hard money lender. There are reasons why you should select a hard money lender near you. A hard money lender based near you is experienced in lending loans in your market. Moreover, the hard money lender makes sure it is precise in underwriting your asset because it takes into consideration your specific market’s activity. Moreover, local lenders are more interested in your personal success hence giving you more personal attention.
Check the degree of transparency. The parties involved should have the ability to access the loan data such as fees and any third party cost so they can know what is expected. A hard money lender is needed to also act in line with the printed loan program rules. A good hard money lender should not have any difficulty completing draw requests, returning calls or answering your questions.
Ensure a hard money lender is licensed. You should peruse the license of your hard money lender to ensure it is valid. This guarantees of their qualifications having been vetted by the local authorities to ensure they are qualified for hard money lending. In addition, you are sure the loan rates a hard money lender charges are not exploitive. Moreover, you can check any complaint the hard money lender on your mine left unsolved. Make sure the interest rates are taken into account. Before taking a hard money loan, ask a lender about their interest rates. In case a hard money lender seem like they are hiding something, do not continue with the deal as this may make you pay higher rates than initially agreed. Also, compare interest rates different hard money lenders demand while being keen on what past customers say so you can decide accordingly. Get more details here: https://en.wikipedia.org/wiki/Term_loan.