Tips From a Lender- You'll Want to Take Notes!

If I could tell my borrowers and brokers anything, it would be the following:

As a lender, we hate when your loan process gets backed up as much as you do. So, here's some tips to ease the process during your next real estate transaction. Your welcome.

When time is of the essence, choosing a private or direct hard money lender to fund your project is the way to go. Typically, a hard money lender’s time frame for closing is significantly shorter than going through a bank for funding, due to the strict rules and regulations that the government requires banks to follow. Private lenders don’t ensue with thorough examination of financial documents, history debt, and credit score. Even if you aren’t in a race against the clock, nobody wants to find themselves stuck in a drawn-out closing process that seems never-ending.

PREPARE YOURSELF: 

Hard money interest rates are GOING to be higher than what the bank offers. Why? The risk factor that the lender encumbers is greater. If you’re choosing the hard money route because a bank turned you down due to a low credit score or spotty financial history, then expect to pay slightly more since you pose a higher risk. 

ANSWER QUESTIONS PROMPTLY & STAY IN TOUCH:Make sure you are open and available if the lender needs to get in touch with you. Consistently check emails and keep your phone close-by. If an underwriter has a question or needs information that your loan depends on, answer those questions promptly. There are multiple parties involved in loan processing and preparing a loan to close. The sooner you provide your lender with the information they seek, the sooner all requirements to close can be taken care of. 

SUBMIT THE RIGHT DOCUMENTS:

Your lender will provide you with a list of documents they need. All documents are pertinent to the loan process. Gather the required documents as quickly as possible and get them in their entirety to the lender. Make sure the documents you’re sending is what is being asked for. Your lender shouldn’t have to tell you how obtain documents pertaining to you personally. Also, don’t make your lender beg for the documents they need. You came to them asking for a loan, so help them help you. 

WORK WITH THE LENDER TO SOLVE PROBLEMS:

It never fails, something will unexpectedly come up that needs to be care of. Most obstacles are small, but all issues must be cleared before you get the OK to close. If you know of any obstacles that might persist, mention them before hand or get a jump-start on getting them taken care of before the lender finds them. Hiding certain matters will only lengthen the loan process, it’s always better to be upfront about everything. A lot of times, if a lender is aware of possible road blocks, they can assist in solving the problem.