Real Estate Investor · kansas city, AL · Member since 2008 · 66 posts · 0 votes
I went through the process of giving them my w2's my tax returns, my bank statements and my check stubs. I sent them over the numbers to the property and they worked. She sent it to the underwriter and then they turned me down.
The mainstream of investors want to quantify creditworthiness and the credit report/scores are the common vehicle for conducting this litmus test.
If your scores are lower then 550, then there are investors that will consider "anyone" as long as there is enough "trapped/unrealized" equity in the deal.
I went through the process of giving them my w2's my tax returns, my bank statements and my check stubs. I sent them over the numbers to the property and they worked. She sent it to the underwriter and then they turned me down.
A traditional hard money lender does not check credit. They also do not lend on ARV as a rule. They focus on the as-is value. If you want a lender to lend you money based on a possible future value if you do the work then they want to know more about you and your track record.
Some mortgage brokers are a bit sloppy when they say they have hard money. They use the term to attract borrowers. Then they want to get you into non-conforming loans that require a credit score. In some cases the loan is the right loan. In other cases the broker is doing a bit of a bait and switch.
I was talking to one mortgage broker who said they did hard money all the time. They had no idea what real hard money was. They assumed all hard money required a credit score no matter what. They were trained to get a 1003 filled in and that is all they knew. Nice enough but clearly not sophisticated.
some hard money lenders don't require credit. Many say they don't count it against you but still need to provide it. these look at probability to pay back the loan. True hard money lenders don't require credit, job, assets...nothing. Except your property must appraise for what they say. They typically only lend up to 65% of the value.