Drawing Up Loan Docs as a Private Lender

3 Replies

Hi All,

I have a freshly minted LLC that will be acting as a temporary lender (until I refinance) for a deal I'm involved in. However, I've never drawn up the perfunctory documents that I'm sure you need if you're going to act as a lender and file the mortgage with the county (although many investors in my area make it sound like no biggie). It's important that this is documented as a loan with the county (and not simply a cash transaction) as that affects the refinancing picture. Would someone be able to point me to some documents I could configure myself where I could record the loan, its terms, etc. and file them correctly with the county?

Happy to hear of any pitfalls I haven't anticipated as well.

Many thanks!

Google "FNMA Note" and "FNMA Deed of Trust" and use the standard docs for your jurisdiction.

Go to a real estate attorney or better yet, go to a title company and tell them what you want to do. You get title insurance, loan docs, everything recorded and its all taken care of for you. Very reasonable price when you go to a title company. Attorneys are probably going to charge more.

If you do go to an attorney make sure it is a real estate attorney. Just like doctors specialize, so do attorneys. You dont want to go to a attorney who does immigration to do your deed of trust.

DO NOT attempt to google deed of trust in Texas and try to do it yourself. You would be asking for trouble. Let the professionals do what they do and pay your fees to get it done. Tell the attorney or title company what the terms are for your loan and they will take care of the rest.

@Rick Pozos

Title insurance? He's lending to himself

And who mentioned Texas? OP posted a generic question with no property or transaction details. Regardless, the site he would find by Googling "FNMA Deed of Trust" produces a page of links to all the docs used by almost every 1-4 residential lender (in TX or whatever jurisdiction they are lending in) that is planning to sell the paper.

These are fill-in the blank docs ... note date, amount, interest rate, maturity date, late fee. If temporary financing, you use the Balloon Note and add a Balloon Rider to the DoT. Anyone who was able to sign up to use this site could figure out how to complete those forms correctly, and the end result is an enforceable payment obligation and, if recorded correctly, a valid security interest.

Sorry, but "call a lawyer" or "call an accountant" -- while appropriate responses to a large percentage of the questions posted on BP -- is hardly what people want to hear when they come to this site.

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