Hard money loans can be a convenient source of funds for real estate experts, contractors, and even prospective homeowners and business owners planning to renovate their existing facility. This type of loan is often the best course of action when you have credit issues or are unable to get another loan, say a mortgage loan.
However, before you get in touch with your hard money loan lender, you should know about a few common hard lending mistakes that most borrowers make and you should avoid at all costs for the best results. And they are as follows:
Not giving the correct information to the hard money loan lenders
During the application process, your hard money loan lender will ask for your personal and financial information before offering you the loan. Depending on why you need the loan, you will need to provide them with a few documents to help them have a clear picture of your finances.
You may also need to submit your two or three years of tax return statements to obtain the loan. If you are a business owner, you may need to provide an additional profit and loss statement to the lender.
Make sure you do not withhold the necessary information asked by your lender and provide accurate information so that they can decide whether you make for a reliable candidate or not. Failure to do so may lead to the rejection of your loan application.
Not choosing a trusted hard money loan lender
Many people fall prey to frauds who claim themselves to be hard money loan lenders. This not only leads to the loss of their personal and financial information but also puts them at risk of legal troubles.
Before you choose a hard money loan lender for your purpose, make sure you have done a thorough background check on them and ensured that they are certified to do business.
The lender you choose should be trustworthy, licensed, and have your best interests in mind. Even if you have to ask them some hard questions, don’t hesitate to ask since getting a hard money loan is not a small transaction, and you want to make sure that it’s done correctly, leaving no room for legal troubles later down the road.
If you face trouble finding a reliable hard money loan lender, feel free to get in touch with us and discuss your requirements.
Not having enough money for the down payment
With a traditional loan, you need to pay 5 to 20 percent of the loan amount as a down payment. But since a hard money loan is a private loan, you may need to pay even more. And if you don’t have sufficient money for the down payment asked by your high money loan lender, your loan could be rejected. So, make sure you ask for the down payment from the lender before applying for the loan and have the amount ready in your bank account.
If you are looking for a hard loan for your real estate needs or construction product, we can help. Please get in touch with us today to know more about our financial services.