Lending Rules of Engagement Installment #3

[Stephanie P.]

Here's part of three of a three part series titled Lending Rules of Engagement.  It's a tutorial on how to work with lenders with examples.  The rules never change, but the examples do.

1. Rule 1:  If you have questions; Ask.  "Why is your rate so high?"  Great question.  We aren't asking to see any income.  We don't care where you got the money to close and there is no prepay because the property is a 1-6 unit in New Jersey and it's not allowed. All of the risk is really on the lender. "Oh, okay.  I was just wondering."
2. Rule 2:  Get me the documents I need.  One of the first questions I'm asked is "How fast can you close?" and the answer is always "A few days after you get me all the documents I need.  The faster you get them, the faster we can close."
3. Rule 3:  You have to make choices.  In almost every situation, do the math and go with what you think is best.  After you've asked the questions, consulted whomever you need to consult and run the numbers; PULL the TRIGGER.
4. Rule 4:  Don't pay money for anything other than credit reports and appraisals.  I can't say it enough; paying for lock in fees, holding fees, up front processing fees, forced insurance fees, default insurance fees and any other fees other than a credit report and an appraisal up front is a sign of either a desperate lender or a scam.  Neither of them are any good.
5. Rule 5:  The numbers have to work.  Not just for you!!  The numbers have to work for the lender as well.  If the numbers only work for you, we'd be out of business and subsequently, so would many investors.  Win/Win.  Everybody has to win in these loans or nobody will win.
6. Rule 6:  Nothing is free.  Ain't it the truth.  Regardless of the industry.  Regardless of the century, nothing is free.

Stephanie