Hard money lenders lend hard money loans which are short-term loans for individuals investing in real estate. These individuals generally flip the properties in order to make a profit. Because the hard money loan process is significantly shorter than that of a traditional loan, investors use hard money to acquire investment properties quickly. But how do you know if you are working with a good hard money lender? Here are a few traits to look for when deciding on a hard money lender:
Unlike traditional lenders, hard money lenders can offer real estate investors two-way communication. Traditional lenders may have strict regulations for potential borrowers but hard money lenders work with the borrower to find a loan that works for them. Because hard money lenders can negotiate the terms of the loan with the borrower, communication is an important aspect of the process. Ask yourself these questions: Is the hard money lender presenting information clearly? Are they responding to my questions quickly? If the answer to these questions are “yes” then that is a good sign.
You want a hard money lender who knows what they’re doing and a good way of knowing if a hard money lender has experience is looking at their website. If their website has little information about their services and investment opportunities, that’s a good sign that they don’t have the experience you’re looking for.
Good hard money lenders should be able to respond to questions and comments quickly and they should always be able to meet deadlines. Attention to detail is very important when it comes to the underwriting process so if the hard money lender does not seem professional, it is best to take a different route.
Hard money lenders are not like traditional lenders. They don’t just finance the loan and then you never hear from them again. Hard money lenders are on your side and you should be able to work as a team. Without respect, that relationship falls apart. You can find out if the hard money lender values respect by checking online for testimonials from past borrowers.
Though hard money lenders are not as concerned with the borrower’s credit score as they are with the value of the property, the lender may ask about your credit history. Your credit history may have an effect on the interest rate that you receive on the loan though you will not be disapproved for the loan based on your credit score. If you can, it will help to resolve issues on your credit score before you apply for a hard money loan.
Even if your credit score is less than perfect, hard money lenders are able to work with you and negotiate the terms of the loan unlike a traditional lender who will deny the potential borrower a loan if they are even just a point off. An important aspect of alternative lenders is that they can offer flexibility, liquidity, and partnership. Unlike traditional lenders, hard money lenders can offer partnership and communication in your investments and projects.
When you are investing in real estate, you’re not just looking for financing, you are looking for a lender who values open, two-way communication. Some important Trust Deed Investment Information you’ll need are the basics of finding a great MLB. Communication, integrity, and timeliness is most important. Finding an alternative lender to handle these investments doesn’t have to be difficult. Find out more about HML Investments here.