finance

Here’s What Industry Insiders Say About Hard Money Loans

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For some property owners, the main issue when choosing between lenders is who will waive the underwriting fees. Every property owner has certain things they want to get out of the deal. For another, it could be which lender is going to ignore the fact that a lien is on their home. Not much luck will come out of that supposedly. But each individual has different needs and wants.

For insiders that have been dealing with lenders for

For some property owners, the main issue when choosing between lenders is who will waive the underwriting fees. Every property owner has certain things they want to get out of the deal. For another, it could be which lender is going to ignore the fact that a lien is on their home. Not much luck will come out of that supposedly. But each individual has different needs and wants.

Industry Insiders and their Observations

For insiders that have been dealing with lenders for years, they most likely will have more knowledge than most. They will understand that traditional mortgage lenders are very much different from hard cash private lenders. They are also aware that not all traditional banks follow the exact same guidelines.

For example, even though some traditional mortgage lenders rely on the credit score of the property owner, there are some that follow the Fannie Mae guidelines. These guidelines are less strict and more consumer-friendly. Under the Fannie Mae guidelines, an individual can qualify with a credit score of 620. While more traditional banks may require at least a 700 credit score.

A more experienced borrower will understand that hard cash private lenders do not rely on credit scores at all. So they will immediately understand that going to a hard cash lender is more sensible. It is well known among folks that frequent private lenders, that a credit score lower than 500 is acceptable.

Hard money lenders may require references. If they see that the credit score of a property owner is quite low, references, perhaps about 3 may be requested. In this case, references should give clear examples of times when the property owner showed good judgment.

Further along, the financial history of the property owner should be free of bankruptcies and foreclosures. If they are not, any insider would understand that it’s fine. Because hard cash private lenders do not rely solely on financial history, the borrower should still be optimistic.

Explaining to the private lender what caused the bankruptcy or foreclosure does not hurt. It can only help the situation. Remember private lenders are using their own money. If they are convinced that the potential borrower is being sincere, they will approve the loan. Knoxville hard money lenders listen to all of their clients and attempts to help each and every one of them.

Bottom line most private lenders will approve the loan as long as the property owner can come up with down payment and collateral. Insiders understand this fully. Regardless of the property owner has references, or no bankruptcies or no foreclosures they will run into a wall without the necessary collateral and down payment. Knoxville hard money lenders will do what’s needed to get loan approvals for as many people as they possibly can.

Down payments can be as high as 30% of the total loan, or as low as 10%. It all depends on how comfortable the private lender feels. The purpose of the down payment is for the potential borrower to demonstrate that he/she can come up with cash. If the property owner can a poor financial history, of course, the down payment will most likely be much higher.

Insiders that have been dealing with various lenders whether they are private or traditional understand that not being able to come up with the collateral is a deal-breaker. Yes, an application can be put aside for a little bit, while the property owner attempts to straighten out the situation. But is it sits too long, the entire loan process will have to be done over again. This could be costly and annoying. One huge tip; making sure that the property used for collateral is actually worth that amount before starting the loan paperwork.

ears, they most likely will have more knowledge than most. They will understand that traditional mortgage lenders are very much different from hard cash private lenders. They are also aware that not all traditional banks follow the exact same guidelines.

For example, even though some traditional mortgage lenders rely on the credit score of the property owner, there are some that follow the Fannie Mae guidelines. These guidelines are less strict and more consumer-friendly. Under the Fannie Mae guidelines, an individual can qualify with a credit score of 620. While more traditional banks may require at least a 700 credit score.

A more experienced borrower will understand that hard cash private lenders do not rely on credit scores at all. So they will immediately understand that going to a hard cash lender is more sensible. It is well known among folks that frequent private lenders, that a credit score lower than 500 is acceptable.

Hard money lenders may require references. If they see that the credit score of a property owner is quite low, references, perhaps about 3 may be requested. In this case, references should give clear examples of times when the property owner showed good judgment.

Further along, the financial history of the property owner should be free of bankruptcies and foreclosures. If they are not, any insider would understand that it’s fine. Because hard cash private lenders do not rely solely on financial history, the borrower should still be optimistic.

Explaining to the private lender what caused the bankruptcy or foreclosure does not hurt. It can only help the situation. Remember private lenders are using their own money. If they are convinced that the potential borrower is being sincere, they will approve the loan. Knoxville hard money lenders listen to all of their clients and attempts to help each and every one of them.

Bottom line most private lenders will approve the loan as long as the property owner can come up with down payment and collateral. Insiders understand this fully. Regardless of the property owner has references, or no bankruptcies or no foreclosures they will run into a wall without the necessary collateral and down payment. Knoxville hard money lenders will do what’s needed to get loan approvals for as many people as they possibly can.

Down payments can be as high as 30% of the total loan, or as low as 10%. It all depends on how comfortable the private lender feels. The purpose of the down payment is for the potential borrower to demonstrate that he/she can come up with cash. If the property owner can a poor financial history, of course, the down payment will most likely be much higher.

Insiders that have been dealing with various lenders whether they are private or traditional understand that not being able to come up with the collateral is a deal-breaker. Yes, an application can be put aside for a little bit, while the property owner attempts to straighten out the situation. But is it sits too long, the entire loan process will have to be done over again. This could be costly and annoying. One huge tip; making sure that the property used for collateral is actually worth that amount before starting the loan paperwork.

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