Fees and charges are to be expected when applying for hard money lenders. Origination fees, title search fees appraisal charges are all included in most underwriting processes. Origination fees are used for getting the underwriting process started.
Five Things about Hard Money Loans
The amount could vary. If the cost of the home is around $400, 000 it could be as much as $1,200. The cost is typically 1 of the total value of the home.
Title searches take place to verify that the home does not have a lien on it. It checks to make sure that the home does indeed belong to the owner. If there is anything that is fishy concerning the home, it will come up during the search. The fee could be as much as $100.
Appraisal fees are conducted by a professional appraiser. Their job is to go in and assess the home. A home assessment will determine the value of the home. Knowing the cost of the home is beneficial for collateral purposes.
Some fees and charges could get waived by hard money lenders. It would be up to the lender. Some will certain charges to lighten the burden and make it more convenient for the potential borrower.
Collateral is a big deal when it comes to being approved by a hard money lender. The applicant has to be able to prove that he/she has enough property to cover the amount of money that is to be borrowed. Without the right amount of money to the loan, the applicant could be denied. Dallas hard money lenders will do everything they can to assist the potential borrower.
Another issue that comes up during the loan application process is the financial history of the applicant. Bankruptcies and foreclosures may not keep a potential borrower from being approved. It is not a good thing to have things like multiple foreclosures. At Dallas hard money lenders they would try to work with the applicant as much as possible.
Most likely references will be required if bankruptcies and foreclosures are on the history of the applicant. Giving positive comments about the applicant can help build the confidence of the lender. The applicant should bring at least 3 good references for truthful situations that reflected good financial judgment.
With good references, the lender is more obliged to assist the applicant.
Down payments can cause stress among the borrower. Some borrowers simply do not have 1-3 of a loan. The inability of the property owner to come up with the down payment can raise a red flag for many lenders. Being able to put down the loan let’s the lender know that the property owner is financially stable and can save money. The ability to save money is important because it shows that the applicant will make his/her monthly payments.
Sitting down and discussing the repayment date is a vital part of the loan process. If the repayment date is too early, the applicant will not be able to make it. The property owner needs to take into consideration that not only does the home need to be renovated, but it also needs to be sold.
It cannot be in the process of being sold, but it needs to be actually sold. The money has to be in hand to be given to the lender. If the borrower does not come up with the money by the due date, a fee could be charged. Most hard money lenders will extend the time at this point.