Questions You Should Ask A Lender When Applying For A Hard Money Loan

1
Questions You Should Ask A Lender When Applying
For A Hard Money Loan.
www.acalending.com
2
Are you a new hard money borrower who wishes to
obtain a hard money loan in California? It may be
terrifying while inquiring about a hard money
loan for real estate! Having a discussion with
the professionals you choose to work with when
looking for your California hard money loan can
help ease this tension. The hard money lender
should be able to educate you about hard money
loans. Please do some research. You can do it by
asking a few questions to the hard money lenders
in California. It will help you avoid adverse
situations or stay away from hard money lenders
who are unable to deliver what you need. Here are
some questions to consider when looking for a
Californirnia hard money loan
3
1. How much expertise do you have in lending hard
money? It is crucial to confirm that the lender
has relevant hard money lending experience and
experience with the specific kind of hard money
loan the borrower is looking for. The better the
hard money lender, the more experience they have.
Leveraging the lenders expertise will help the
borrower successfully obtain the funding
required.  2. What is your real estate
license? Verify the hard money lenders license
status. Their license should be visible on their
website and in any promotional materials they
create. Request their license if necessary. Then,
you can use the license to perform a search on
the state website. It will reveal additional
information about the licensee!  3. Are you a
broker or a direct hard money lender? A direct
hard money lender will handle the whole loan
transaction and provide internal funding for the
loan. A hard money lender broker will approach
other funding sources with the request. Working
with a hard money broker is advantageous as you
have access to many different loan programs and
funding sources rather than just one.
4
4. Have you contacted prior borrowers
references? A reputable and knowledgeable
California hard money loan provider should have
no trouble directing a prospective borrower to
good evaluations and endorsements from pleased
customers. The lender may include reviews or
recommendations on their own website or on
websites belonging to third parties. However,
there can be a problem if the lender has yet to
have satisfied customers in the past.  5. How
many points do you charge, and what is your
interest rate? The two elements that most
commonly determine the cost of the hard money
loan are the interest rate and the points. Speak
with some leading California companies that offer
hard money loans. You can get a fair idea of the
range of rates available for their loan request
from it. However, you should consider the
experience and trustworthiness of a lender that
offers a hard money loan in California.
5
6. Is there a fee for early payment? A minor
prepayment penalty, which requires a minimum
interest to be paid on a loan, is a typical
practice among lenders. Prepayment penalties
frequently have no impact on the borrower at all.
The borrower must ensure any prepayment penalties
fit into their anticipated schedule. The borrower
may occasionally eliminate a prepayment penalty
by negotiating a higher interest rate or paying
more points. The owner-occupied loans are not
permitted to have prepayment penalties.  7. How
soon will the loan be funded? The hard money
lenders approve the fund in an week or two.
Reputable direct hard money lender may be able to
fund hard money loans in as little as 3 to 5 days
as well. They do it to keep a deal alive!
However, sanctioning the loans take at least one
week or two due to certain state rules and
disclosure requirements.
6
8. What loan terms are available?
In California, hard money loans are often only
used temporarily. It is typically offered for a
term of 12 months to 5 years. In contrast, some
lenders might only provide terms of 1 to 2 years.
They work with the borrower to ensure the
timeline with the lenders loan terms. Ask these
questions upfront. It will assist you in avoiding
wasting time on a hard money lender who wont
grant your request for funding. In some
circumstances, a fix-and-flip investor will need
a loan to buy the property and have money set
aside for renovation costs. In contrast, some
lenders can offer to finance all or a portion of
the renovation expenditures. Some hard money
lenders will provide a loan to buy the property
and demand the borrower have additional funds to
cover the rehab. Find the hard money lender
discuss whether they offer financing to cover the
renovation cost.