Has anyone worked with individual lenders?

9 Replies

I am under contract due to close

On 7/31/2018 a member reached out to me and agreed to do the deal on my terms but is not a company and wants a 2.5% fee 

Not sure how to proceed  I will

Not send money not knowing if they are legit. Please advise. I was sent application and finding questionnaire will be happy to fill out how does this work.

I've never worked with private lenders, having always gotten either a conventional mortgage or paid cash and gotten a first-place HELOC down the road. But asking for a fee up front doesn't pass the smell test for me. If it gets folded into the loan, that is another matter.

Hi Marilyn--

A 2.5% Lender fee isn't out of the ordinary, but should either be paid at Closing or financed into the loan amount.  Also, even individual Private Lenders should be able to provide you with an Estimate of Cost, Good Faith Estimate or pre-Closing Disclosure that you can present to your Title Company.  At Closing, your Title Company will verify that the Private Lender's funds are on deposit (likely wired) prior to any document signing or any money changing hands.  Any deviation from this process could well indicate a scam.

Hope this helps and best luck moving forward!

Marilyn!  My fellow Texan...by all means do not send, sign, agree, or hand anything over if you have ANY doubts.  AH I just noticed the post is 4 days old.  Well, I'm not advising that someone is definitely up to no good, but if they haven't provided you with any type of comfort, peace of mind, and trust that you need just shop around as much as you can.  


Final Loan Terms in Writing BEFORE ANYTHING

Were you provided with a Proof of Funds?

How is the process?  Responsiveness is SOOO underrated IMO.

As far as the fee...are you happy that you saved any money and did this person do a worthy job?  I do support everyone trying to be fair and earn their dues but for 2.5% he should be darn near perfect and Johnny-On-The SPOT.

Take care now.

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