How to Get a Hard Money Loan Approval
Category : Hard Money Loans
1) Find the right project. Hard money is collateralize d with the property in question so finding the right one is very important. A property valued in the right range may not be in a suitable neighborhood. Hard money lenders want to know that the property and the location are a safe investment.
2) Have the proper documents ready. Hard money loans are primarily secured with the property but knowing about the borrower is important. You may be asked about credit, income and assets. Be prepared 3) Have the proper documents ready. Hard money loans are primarily secured with the property but knowing about the borrower is important. You may be asked about credit, income and assets. Be prepared
3) Have an exit strategy. Hard money loans are typically short term and usually are 1-2 years in length. The lender wants to know that the borrower has a plan for either selling or refinancing the property before the term is up. Knowing how you plan to repay the loan is a key factor in a hard money lender’s decision.
4) Do the research. The borrower should know the area they want to invest in and should have pictures of comparable properties. Finding the recent sales of similar properties is also important.
5) Talk to a contractor. If the borrower brings a estimate from a contractor showing what repairs are needed and the costs involved, they are much more likely to be considered for a loan.
6) Bring value to the table. Hard money lenders want to see that borrowers are not in a financially difficult situation. Lenders will look for cash on hand, a good credit score, cross collateral, and experience investing in real estate. Not all factors are needed but showing one or more will help sway a lender.
7) Perform. Hard money lenders want to see that you’re interested in this loan. Return calls promptly and get the information they need in a timely manner. Hard money lenders keep less capital on hand than banks. If you delay in getting back to a hard money lender, they may lend their assets to another borrower.