Vetting a Private Money Lender

6 Replies

I am in the process of vetting a private money lender and I want to make sure that it's not a situation that sounds too good to be true.  So I need help with the following:

1. Is a down payment typically required? 

2. The origination fee, Personal guarantee insurance,  Hazard insurance and 5% down payment required prior to loan disbursement?

3. 5% interest rate (annum)

I've read some forums where you don't give any money upfront because of scams so I just want to be sure that this isn't one of them.  I'm not familiar with this individual and found him on bigger pockets.  I don't want to assume that just because I found this information on bigger pockets makes it legit. Any help would be appreciated. 

SCAM. No legitimate lender is going to ask for 5% before the loan closes. If there are fees and/or points they should only be paid at closing. If you give the person in your post ANY money the odds are you will never see it back nor will they give you the loan.

BTW---NOBODY lends at 3.5% interest. Not even my rich uncle:)

Yea, that's why I was so skeptical.  I used to be a loan officer and we never required fees or points to be paid prior to, but included in the loan and also the interest rate is actually 5% which is still the lowest I've found from a private lender which started my curiosity and skepticism.  What are the typical lending guidelines of a private money lender?  Also bigger pockets need to vet these individuals that post as private money lenders on their site.

ya un fortunately its not BP job to vette lenders its borrowers that need to know reality of the lending world.

who in their right mind would think there is 3.5 % private money. ???? for investment deals.

And since your a lender where or when have you ever heard Of PG insurance that does not exist..  LOL..
come on your smarter than this since you were in the business.
I can give a pass to a newbie with zero experince but a lender  wholly cow.

Scam, no lender will ask you for those funds prior to finishing the deal and give you that rate if you do not have a pre existing relationship. 

You should report him to BP moderators to make sure he's not targeting other people. 

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