4 Signs You've Found A Good Hard Money Lender


Do you want to get a hard money loan to serve as a bridge loan on your next home or to buy an investment property? Hard money loans — private loans that use the asset as collateral and have much fewer rules to adhere to than federally-backed loans — are a popular and useful source of capital for unusual real estate purchases.

However, as beneficial as a hard money loan in your time of need is, it requires some additional diligence on the part of the borrower. If you want to protect yourself, you should learn the signs of a good hard money lender. What are some of these? Here are four of the most important.

1. Reasonable Fees. This type of loan often comes with a higher cost than traditional loan types. But that doesn't mean you should pay an exorbitant amount of fees either. Research the market and other lenders' fees and rates before deciding on a lender. Cost isn't the only way to choose a lender, but a reputable investor will have reasonable fees for this market.

2. You Work With the Lender. When shopping around for a loan, look for a company who offers the loan in-house rather than from an outsourced broker. Brokers have their own interests to look out for and may be more of a sales person than an agent. But the lenders are the ones you want to negotiate and sign a contract with, so you want to have a good sense of who they are. 

3. You Understand the Steps. Look for a lender that is upfront about what you will need to do in order to be approved. Vague promises and glossing over of the specifics could be a sign that you'll encounter trouble with the actual loan process. Instead, work with an agent who can clearly delineate the various forms and certification necessary as well as the time each tends to require.

4. No Undeliverable Promises Are Made. They say that if something sounds too good to be true, it probably is. Reputable hard money lenders are honest about how things work and your chances of a successful loan and real estate transaction. Such individuals will not promise you things that the market simply cannot fulfill.

When your lender passes all these indicators, you likely have a high-quality business to work with. Then you can move forward with your real estate investment with confidence and with the right loan. 


30 September 2019

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