Guide to Successfully Selecting a Hard Money Lender
Selecting a hard money lender is not as simple as driving to your local bank. But using a few tips you can make a great selection who will meet your hard money needs.
The total cost of borrowing is certainly one of the largest factors to consider when evaluating lenders of any type. You are trying to secure the best interest rate as well as the overall terms that best meet your needs because no one ever wants to waste money. So, when seeking a traditional loan, you really focus your scrutiny on the rates and terms of the proposed loan. But when you enter into the world of hard money, there can be several factors which should be scrutinized with equal intensity.
The reputation and legitimacy of a hard money lender is a critical factor in your selection process. Unfortunately, there are some unsavory characters who choose to portray themselves as hard money lenders simply for the purpose of scamming potential borrowers. So, a good first step in your investigative process is being certain that your potential lender is licensed, bonded and insured. This provides you with peace of mind when you consider divulging personal and financial information to a hard money lender. You can also look into the lender’s past history by speaking to references provided to you by your lender.
You will also want to pay particular attention to the terms that each lender is offering. Unlike with traditional bank loans which are highly structured and dictated by the lender’s policies, hard money lenders have the ability to be quite flexible on the terms that they offer or the terms that you counter offer and they accept. Knowing that you have this unique flexibility can be a big help as you begin to compare the offers from a variety of lenders. This flexibility can cover things like the length of the loan, the fee structure, and even if an early payoff will be accepted without a penalty. Over the lifetime of a loan, these terms all have the potential to save you money.
If you are new to the world of hard money lending, then you are likely to have a great many questions about the process in general and the terms and documentation for your specific loan. Selecting a local hard money lender is a smart way to reduce your stress as you complete this new and important step in your financial future. Face to face meeting and an in-person loan signing can be a big help in creating a comfort and confidence level that lets you know you are making a great decision.
Be Honest and Forthcoming
There is no reason to be uneasy about the process of borrowing from hard money lenders. Any legitimate lender is going to welcome your questions in an effort to increase your comfort level and ensure the success of your loan. Explain your situation, ask for guidance and some education on the process and know that you are making a wise financial decision.
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.