Hard money lending has become more common in recent years, and as such, there are more lending options available for borrowers to explore. On the one hand, having more companies to compare when seeking quick financing is generally positive. However, having more borrowing options also means you’ll need to consider your choice more carefully.
Follow these steps to choose the best hard money lender for your borrowing needs.
Determine Your Needs
Before choosing a lender, it’s wise to explore your options and determine your exact borrowing needs. This way, you can decide whether a hard money loan is the right choice. For many applicants, hard money lending is an ideal financing method due to the quick availability of funds upon approval, lenient or absent credit score requirements, and the ease of the application process compared to traditional lending.
If you have determined that hard money lending is the best option for you, you’ll want to make sure that you choose the right lender.
Browse Lender Reviews
When looking for a legitimate, reputable lender, it’s a good idea to browse online reviews posted by past borrowers. While looking at reviews on the company’s site is a great place to start, it’s also crucial to look at third-party reviews available through organizations like Yelp, the BBB, Google Business, and Consumer Report. This way, you’re more likely to get a realistic impression of what other people have experienced through a specific lender. The lender can easily display only positive reviews on their website, but with third-party review sites, the lender cannot simply manipulate reviews by deleting ones they don’t like.
Consider Rates and Terms
A major part of choosing the right lender involves reviewing the hard money loan requirements you seek. To choose the right lender, you’ll need to determine what sort of timeline you need for repayment of the borrowed money and the hard money loan rates you can afford. A hard money loan calculator is a great tool to use when planning your financial venture.
It’s understandable to want a lender that offers the lowest hard money loan rates, but exceptionally low rates might be a cause for concern if other red flags accompany them. Research your options carefully to avoid hard money scams.
Look for Local Lenders
Working with a local lender presents several benefits, including the lender’s knowledge of your area’s market, the company’s earned reputation in your community, and the increased likelihood of the lender’s legitimacy.
It isn’t a requirement to work with a local lender, but it can be a great option when the rates, terms, and monetary sums meet your needs. However, when it comes to hard money lending, the essential factor in swaying your decision should be the availability of loans that meet the requirements you’ve outlined for yourself.
Research your hard money lender options and weigh the pros and cons of each offering before deciding which company to borrow from.