There speculations among borrowers particularly the ones who have never tried hard money loan. If you are going to compare the procedure for getting one with bank loan, you’ll find that the former is much easier and straightforward. As a matter of fact, there are many similarities between the process used for hard money and investment property loan. Additional paperwork however is needed on the part of the owner. If you are thinking of getting hard money loan and wish to make it easier, then the following steps can help you out.
Step number 1. Research for reliable local hard money lender – the first way that you have to do is none other than finding a lender who locally lends money. The truth is, there are many different ways on how you could do this such as asking for referrals or searching the internet. You can also visit local real estate networks and even ask for their suggestions.
Step number 2. Conduct interview of your prospective hard money lenders – after you knew some money lenders operating locally, the next thing to do is to interview them. Call all your prospective hard money lender to get started with the interview. As a way to comprehend the strategies they proposed, do a brief talk with them. A rough estimate with interest rates and points must be given to you as well.
Step number 3. Decide which lender and apply a loan – the process for applying a hard money loan is quite easy and quick. Simply fill in a brief personal financial statement regarding your liabilities, income, expenses, assets, employment, subject property and most especially, about yourself. The whole process can take you approximately 15 minutes.
Step number 5. Sign documents – remember as well that only after you have signed the disclosure, that is the time when the loan documents will be prepared. There are numerous things that make up loan documents and some of these are note, payment guarantee, deed of trust, arbitration agreement and escrow instructions.
Step number 6. Wire down payment – when the hard money lender has received the entire signed document, you now have to pay for the down payment. Your loan would be funded only when the escrow has given the go signal that they have the documents.