Real Estate Borrowers Should Know the Answers to These 5 Hard Money Loan Questions
You should expect a hard money lender to learn more about you and your credit score, financial history, and more to decide if a loan request falls with the requirements. The crucial question that they are trying to answer when a real estate borrower meet a hard money lender is whether you will be accountable and motivated enough to repay the loan.
To give a hard money loan, they must go beyond conventional loan criteria to understand you and your ideas.
Hard money lenders will ask real estate borrowers these five questions, so prepare yourself to answer these during your hard money loan approval process.
How much do you intend to use as a down payment?
Hard money lenders usually demand more from you than conventional lenders, as they want to feel that you will stay true to your word.
What is the value of this asset?
The value of the property differs for hard money lenders from the bank lenders. They are interested in funding loans for potential properties that may increase in value via improvements, rehabilitation, or management changes.
As a result, the hard money lenders often use the property’s after-improvement value to determine their loan amount instead of the traditional lenders’ as-is-value.
What is your credit history?
It is important to note when working with private lenders that loan choices are not heavily influenced by your credit ratings but by your credit story.
You should prepare to discuss your financial past and be open about any issues or problems so that your lender can plan based on your credit score’s context.
What is your strategy for exiting the loan?
Because they structure these money loans for the short term, lenders want to ensure you have got a strategy to pay back the loan until it’s made.
When do you need to close the loan?
Within a matter of weeks, hard money lenders can close loans. If your contract is time-sensitive, make sure your lender knows it. By providing all the documentation, you can help speed up your closing time immediately.
Your answers can help you pave the way to getting your hard money loan and starting on your next real estate improvement project. Contact Pinetree Financial Group today to speak with one of our staff members and start your loan application process.