A few Months ago I was looking into actually purchasing this property and I didn’t have the funds to cover the purchase of the property. I began to look into a hard money sources and the Hardmoney lender Seemed to legitimate and we begin to go through the process and we got to actually making a payment in the payment was 1250. Initially I paid the 1250 then I had to pay an extra $200 contract fee then after paying the $200 attorney free, and he requested a final fee of $400. It seemed like every time I paid something there were there was always something else to be paid and I eventually I stop paying, never got the funding lost the deal. Now I am skeptical about Hard money lending and confused about what is the true process. Has anyone had any fear of hard money lenders and what were they?
Yep. You found a scam. Never, NEVER, never pay money up front for a loan to a lender. It should all be gathered by an escrow or title company and documents, money, etc correctly sorted out and finalized (closed). Tough lesson but bet you won't let it happen again.
you got scammed its rampant on the internet.. red flags are this.
1. too quick to approve you when you have little to no expreince
2. they don't ask you for detailed financial information from you.
3. rates lower than you see from bigger legit lenders ( too good to be true)
4. money up front and just like what happened to you.. need this fee .. oh and now I need that fee and of course you will get funding tomorrow if you pay this fee.. this is all a scam plain and simple.
find reputable HML in your market go meet them.. if you have no experience it can be tougher.. if your credit is less than 640 can be tough.. if you have no cash for a down payment.. pretty much impossible..
Lenders always get paid out of escrow during closing. The only thing you should be paying for beforehand is an appraisal if the lender requires it.
@Kathie Riedel noooo! I was too eager to get the deal done. I have now learn my lesson!