While hard money loans can greatly simplify your life and save you from the hassle of maintaining a good credit score, the wrong hard money lender can land you in legal complications.

However, this shouldn’t put you off from securing a hard money loan for your financial obligations. Our blog lists some handy tips to help borrowers navigate through the hard money industry smoothly and choose the right lender for all their hard money needs.

Take a look.

Look For Hard Money Specialists

Since these hard money loans are short-term and require minimal documentation, they might seem simple to the borrower. However, an inexperienced or novice lender can mess up the whole process for you.

It’s crucial that you get in touch with hard money specialists that know the ins and outs of the hard money loan process. From working on origination and servicing to structuring the loan, hard money specialists can simplify the process and ensure that your funds are released within a few days.

How Quickly Do You Want To Get Approved?

Sure, hard money lenders are faster than traditional banks and credit unions, but you must consider this question before setting out on a hunt for hard money specialists.

Do you need to close a real estate transaction in two weeks? Or do you need the money to flip properties?

Each hard money lender has a different time frame for processing and approving applications. While some might approve your application and release funds within a week, others might take a few days to approve your loan application.

Borrowers must opt for a hard money provider that suits their hard money needs and help them close real estate deals within the set time frame.

Know Your Hard Money Needs

Some hard money specialists are all about investing in real estate transactions and facilitating borrowers; however, others might be open to a whole lot of investment opportunities. Before you meet up with a hard money lender, consider why you’re applying for the loan.

Do you need money to finance your next real estate project? Or are you a house flipper who wants to renovate a property?

These questions can help borrowers choose the right hard money lender that fits their criteria and meets their hard money needs.

Transparency Comes First

If you’re working with a hard money lender that isn’t open to communication or just seems a little off, you can always back out of the deal.

Some hard money lenders lie on the scamming spectrum and are after your personal details. We recommend that you don’t disclose any personal details or fill out any application forms until you’re assured of the lender’s credibility. These firms can use this information to commit identity theft and fraud in the borrower’s name and expose them to legal complications.

It’s better to investigate the lending firm’s transparency and have a background check before signing on the dotted line.

Watch Out for Scammers

Certain hard money lenders might sound like a good deal. However, once you’ve established trust, they might expose you to nasty, hidden surprises!

Often, scamming hard money lenders change loan terms right at the last minute and make them unfavorable for the borrower.

We suggest that you always read through application forms, policies, and other loan term documents before signing them or agreeing to them. Moreover, borrowers should try to seek out referrals from other real estate professionals to find the right hard money lender.

Know Your Hard Money Questions

Even before you schedule a visit to the lending firm, you need to be armed with all the right hard money questions!

• What are the interest rates that the firm offers?
• Are these interest rates fixed or variable?
• How long have the lenders been in the hard money industry?
• Are there any satisfied clients that can vouch for the lender’s services?
• Does the lender have any loan qualifications for borrowers?
• What are the fees and other costs involved in a hard money process?

Such questions can help you make an informed decision and get your hard money application approved in less than a week.

Don’t Underestimate The Red Flags

Whether they’re in a personal relationship or a lender-borrower relationship, red flags can help you get out of a shady situation!

To avoid getting caught in a hard money scam, we recommend that you look out for any tricky signs and red flags early on.

Not asking for any collateral, having a sky-rocketing upfront fee for clients, or having interest rates lower than 5% just seem fishy and should be avoided at all costs.

Instead, borrowers can opt for legitimate hard money lenders by keeping an eye out for such red flags, trusting word-of-mouth advertisement, and researching the company through their social media handles.

Choose A Direct Lender And Not A Broker

While a broker can help connect you to reputable hard money lenders in the region, they can cost more.

These brokers work with both borrowers and lending firms and forward the buyer’s application to the firms. This can cost you more time and more money in the long run. A broker will probably lead to a delay in the application approval and fund release process.

Borrowers must choose a direct lender, submit their applications, and expect to get approval within 7-10 working days.

Find credible hard money lenders near you

At Commercial Private Equity, we are a credible private money lending firm based in Atlanta, GA. Our expertise and our knowledge in the private lending market and the real estate industry have made us a client favorite all across the United States. At Commercial Private Equity, our representatives are apt at evaluating loan applications and working with our clients to develop feasible loan terms.

Give us a call at 404-301-8633 or head to our website to learn more about our specialized loans, hard money loans, and commercial bridge loans.