Choosing who to do borrow money from requires a moment of thought. Not all lenders work the same way. And many of them adhere to a different set of guidelines.
Most business people, especially those who work in the real estate industry are aware of some of the differences between types of lenders. Particularly between traditional and private lenders. Some of these differences are so significant that it could cause the success or failure of a business.
Tips When it Comes to Hard Money Lenders
St Louis Hard money lenders approve loans and dispense the funds in a much faster way than a traditional bank. This difference could hurt a young real estate business. The investor will be forced to find out that properties sell fast. And though the property may need renovating, there are other real estate investors who see its potential.
In cases like this, the investor must move fast to make preparations to purchase the property. Traditional mortgage lenders can take up to 2 months to have a loan go through the paperwork process and even longer for the money to be transferred into their accounts. Normally, this is not something that property owners want to deal with. Which is private lenders are there the first choice.
Knowing the ends and outs of St Louis hard money lenders can help a lot. Below are a few pointers:
a. bring necessary materials to interview
b. be ready for questions about credit history
c.bring references
d. be prepared for collateral & down payment
Just like any other interview you want to be prepared. Do not come empty-handed. Pulling up your credit score and history online and bringing in copies won’t hurt anything. Perhaps the agent can use it, instead of making the inquiry a second time. Of course, the property owner should be sure to bring his/her driver’s license, social security card, passport, etc.
All financial bank records should be brought in. The lender most likely will like to know how much is in the property owner’s savings. All deeds and titles belonging to all assets should be presented. Remember, the assets that are going to be used as collateral needs to be verified. Even though there will be title and insurance searches, the investor still needs to bring whatever paperwork that he/she has.
When it comes to pass financial judgments and the way they were handled, be sure to be ready to do that. If one thinks that they’re going to be approved a loan and not have to answer some questions they’re mistaken. Practicing answering at home before going to a loan interview can help prepare the investor.
Bringing at least 3 reference letters to speak on behalf of the investor’s past financial decisions will reinforce the positive image concerning money. Hearing from others discussing how payments were made on time helps considerably. Especially, if there are foreclosures and bankruptcies in the applicant’s history.
Prior to going to the loan interview, the investor not only needs to decide what assets to use as collateral, but he/she also needs to be prepared to make a down payment. St Louis hard money lenders almost always require down payments. The down payment is typical, 20-30% of the total loan requested. Remember, the down payment is not the closing costs. Closing costs are the fees applied for investigating the investor and making various verifications. It would be an excellent idea for the property investor to sit down prior to the interview with a calculator so that he/she could have an idea as to the number of costs they are dealing with. Some sometimes the down payment can be reduced by the lender. However, in many cases, it may depend on the investor’s financial history.
