7 Questions To Ask Your Hard Money Lender

Posted by Hard Money Go on October 7th, 2022

Nobody wishes to get in a bad situation with hard money lenders in Houston. When it comes to enquiring about hard money, one needs to be on top of his game to ensure he bags the best deal.

However, the world of real estate gives you very little time to measure the pros and cons of hard money loans. Opportunities do come often and one needs to be ready with the finances. If you are eyeing hard money loans in Los Angeles, we could help you out with a few tips and queries that need to be put up front.

Here are a few questions that should be at the back of your mind while opting for loans.

7 Questions To Ask Your Hard Money Lender 

1. Are There Any Hidden Originating Fees?  

It is not about interest rates in hard money loans. When you look at how hard money loans work in Los Angeles, you’d get to know there are a bunch of other payables as well. From credit check fees to escrow, insurance, notary, and set-up fee, there is a lot in there to consider. Hence, you’d be very cautious of the transparency in cost setting.

2. Could You Get Us Any Past References?

Past references can come in handy for picking the right hard money lender in Houston. The lender should not be reluctant to pose his past clients. If that is the case, you should back off and switch to another lender as early as possible. For what’s worth, you’d get around the ideal image of the lender and can evaluate the pros and cons of the situation.

3. How Long Does The Whole Procedure Take?

Since you’d be eyeing an opportunity that needs instant investment, you’d want your loan to get approved within a specified time frame. The whole procedure might take a couple of weeks to get done. If that takes more, you could literally see your property sliding into the hands of another investor. Hence, whenever you look for a loan, take the exact quotation of the time frame.

4. Are You A Direct Lender?

There are brokers sitting between you and the company. Having one in between has both pros and cons posed upfront. Sometimes, a broker could get you cheaper rates from another source. On the other side, a direct lender can get the whole loan processed faster than the broker. Ask this question to know what is going to serve on your plate.

5. What Is Your Loan-To-Value Ratio?

As evident from the statement, the loan-to-value ratio is the amount you’d get from your lender for the property you have kept as collateral. LTV ratio varies from lender to lender. Hence, you should be keen to know this when you compare different hard money lenders in Houston. If possible, you can get your property valued from other sources to know the worth you are gaining here.

6. What Are The Penalties?

It is common for people to fall into the clutches of penalties. And it is not just on a missing payment, it is also on prepayments. Hard money lenders in Houston and in other parts of the world levy prepayment penalties. Since lenders are seeking to have a complete interest before the repayment, they’d be willing to levy a penalty on the borrower for early payment.

7. What Is The Loan Tenure?

Hard Money Loans in Houston come for a short term in most cases. From 6 months to 5 years, the range, again, varies from lender to lender. All you have to do is evaluate the tenure for which you need the loan. Interest Rates also vary from period to period for which you have taken the loan. Pro Tip: You should also ask for an extension as well.

What marks the Importance of Hard Money Loans?

The importance of hard money loans is felt when you see an opportunity slipping out of your hands. Only if you had the funding available, you could grab the property or investment you have been eyeing on.

Also, having funding available puts you in a position to negotiate as well. When you sit at the table with money, you have a tone, confidence, and the power to close the deal. Every real estate agent does know how important that one deal which sets the chain in motion.

Where can you seek Hard Money Loans? 

Hard Money Go is your answer whenever you are looking for Houston hard money loans. With a procedure that is quick and easy, one can fill out the application and get their loans approved in no time.

Save yourself all the chaos and hop on to our website to access the capital you have been wanting all those years. Do not waste another second, opportunities wait for nobody.