3 Things to Know
About Hard Money Lenders
- Not Every Hard Money Lender is Legit: As you pursue a loan which is not backed by the government or any banking system, the risk that individuals with only their best interest in mind multiplies. This includes people who use the hard money scene as a way to scam people out of their money. Be wary of lenders that want a large starting fee in order to see if you will qualify who might simply disappear after collecting from you, or those that allow themselves to modify the interest rate through an underwriting loophole.
- A Hard Money Loan is Not Like a Bank Loan: The process of obtaining a hard money loan is completely reliant on the lender, as it has no government or company restrictions to meet. For instance document requirements, value determination and speed of funding can all change based on the lenders discretion.
- Never Expect No Documentation: One of the reasons people think a privatized loan will solve their financial issues is the perceived lack of a requirement of any sort of documentation. This is simply untrue, sure the document requirements for a hard money loan may be looser, or somehow different from a standard loan, it does not change that some form of documentation will be required. Each lender has its own list of documentation requirements, so ask and don’t expect or assume that there’s no documentation required.
As you can see their are multiple different factors for you to consider when looking into getting a this kind of privatized loan.