How does the loan process with private lender works ?

- Can anyone let me know the step-by-step process of private money ?

- What is usual amount of points for private money ?

- What is the usual interest rate for private money ?

- At what point, we do we usually pay the fee ?

- How can we verify the legitimacy of private lender ?

Any suggestions or information is appreciated.

Thanks

--uday

Every lender is different, here are the general steps we use:

1. You find a property you like and put a contract on it.  You should put in an option period so you have an out in case things do not turn out.

2. You send the contract and any other info you have (Like a seller's disclosure, report on the property condition, etc) to the lender.

3. The lender evaluates the property and gives you a quick idea of what they will lend.

4. The lender comes out to the property to confirm its condition and generate a detailed proposal for you.  The lender will normally charge you something before they come out since they have to spend time to do it.

5. Once you get the proposal from the lender and it meets your approval, you get a title company involved to close the transaction. The title company do a title search and issue a title commitment. They will also collect all the documentation and prepare a HUD which lists all the fees and expenses.

6. Once the title company has given you the HUD, go to the closing with good funds for the amount you owe on the transaction.

7. Pick up the keys once the title company clears everything!