How to Find a Reputable Hard Money Lender
May 31, 2020Who are Commercial Hard Money Lenders?
June 1, 2020(It can be difficult to evaluate Arizona Hard Money Lenders if you are not an experienced borrower. But having a few tips to evaluate potential lenders can make the process less daunting.)
Unfortunately, not all Arizona Hard Money Lenders are working to provide borrowers with a legitimate option to a traditional loan. There are some who will take advantage of a borrower with bad credit or no credit as well as an investor who is in need of fast funding. But using the following four tips can help you to better evaluate potential lenders and find the one who is best able to meet your needs.
One of the first questions that you will want to ask a private lender is about the turnaround time on funding a loan. The last thing that you want to do is be forced to wait for weeks while the lender accesses funds for you. It is sometimes difficult to be sure that private lenders are providing accurate information, so it is always best to request all of the answers to your questions in writing. Email questions so that you have documented responses in the event of any issues as the process moves forward.
After determining that the lender is able to fund in a reasonable amount of time, the cost of the loan is your next concern. Arizona Hard Money Lenders will generally charge an interest rate somewhere between 10% and 15% based on the perceived risk involved in the loan. This means that a good credit score and solid financial history can secure a better interest rate. The amount of your down payment can also have some impact on the interest rate as a larger down payment will create more instant equity in the property.
Be Sure The Lender is Legit
Although Arizona Hard Money Lenders are not governed by the same rules as banks and mortgage companies, they are required to follow numerous regulations. These include their business practices as well as the insurance that they must carry. Be certain that your lender or any potential lenders that you are considering are licensed, bonded and insured for your own protection.
Get References
You should always ask a potential lender for a list of references. If the lender is shy about providing this list then you should reconsider working with him or her. This is a sure sign that the lender has little or no experience or that he has no satisfied clients who are willing to speak to potential borrowers. Either way that is a serious red flag. Even when the lender does provide a list of references, understand that these are the clients who have had the perfect borrowing experience and are possibly real estate investors who bring a lot of repeat business to the lender. Take their information with a grain of salt. And take the time to check out the BBB and other Internet resources to see what borrowers are saying about the lender. This will give you an honest evaluation of the lender and his or her lending process. With all of this information, you can make a well-informed choice about who to use for your private lending needs.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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