Are you looking for a reliable private money lender near you? Before you settle with a lender that offers low-interest rates and loan terms that seem too good to be true, you must ask them a few questions.
You must prepare your meeting with the prospective lender beforehand and ask them a few tough questions to ensure that you’re partnering up with a credible money lending firm. Here’s what to ask a private money lender before you sign on the loan deal.
Are you a hard money lender or just a broker?
It’s essential to know the difference between the two!
A hard money broker will only request funds from other lending firms and charge you a hefty fee. On the other hand, a hard money lender will process your loan application, set the loan terms, and release your funds in just a few days.
How long have you been in the real estate industry?
The more experience the lender has, the better for you!
More experience in the real estate industry means that your lender will create more feasible loan terms to facilitate and finance the borrower. Moreover, experienced lenders are better at protecting the borrower’s interest and their assets.
What is your interest rate?
Most private money lenders will charge a high-interest rate to lower their high risks. However, specific experienced lenders such as Commercial Private Equity can bend the loan terms with lower interest rates.
Do you require a minimum credit score?
Often private money lenders don’t need to review a credit score or a credit report.
However, it’s better to inquire about the credit score requirements before applying for the loan. Not knowing the company requirements for credit score and having a low credit score can derail your chances of getting approved for the loan.
Will you schedule a property appraisal?
Private money lenders often schedule property appraisals to know the collateral’s value.
On the other hand, other private lending firms might believe your appraised value and avoid the need to get an appraiser on board. Asking this will ensure that you’re not fudging your numbers and are being honest in your application.
Are there any hidden costs to your lending services?
It’s better to learn all about the origination fee, upfront fee, processing, and closing fee before the loan application process. Most lenders will wait long before briefing the client on the hefty hidden costs and come up with nasty surprises for the borrower just when they’re about to sign up for the loan.
How long will it take to fund the loan?
Private money lenders are faster than banks. However, not all lending firms operate at the same pace!
If you need to close on a hot property within a week, try to search for a lender with a quick approval time and an even faster turnaround rate.
Consider Commercial Private Equity for your Next Real Estate Transaction
Our clients can get in touch with our representatives and schedule a one-on-one consultation session. From inquiring about our lending company’s policies to learning about our interest rates, our clients can get all the correct answers at Commercial Private Equity.