I bought a 2 unit for $25,000!
What would you do with 1 million in cash?
How do you find real estate deals and leads?
Do’s and Don’ts of Private Hard Money Lenders
When you search the internet, you’ll find a lot of resources about private hard money lenders. You may need to click dozens of links in order to answer the questions in your head. This article will provide a capsulized information that can help you deal with private hard money lenders.
Usually, private lenders need the following lending criteria:
a. An estimated 65% to 75% of the property’s value
b. No income or credit checks
c. Money is released immediately
d. Higher interest rates
Don’ts
1. Call the private lenders to borrow more money if you already exceeded the 75% value of your property.
2. Pay upfront fees because fees are normally paid at closing.
3. Relay false statements about your current situation because they are just observing your credibility.
Do’s
1. Look around for the most honest lender with lowest fee.
2. Request for the fee breakdown. The typical fees include: loan origination fee, notary fee, and evaluation fee.
3. Inquire about the lending terms and conditions.
4. Check the lender’s prepayment penalties.
Online Mortgage Calculator
Commercial mortgage loan calculators are very useful because they can help in determining the amount that you can borrow as well as your monthly payments.
When you searched over the internet, you can find a lot of real estate mortgage loan calculators. However, before you start the calculations, check if you are using the right type of mortgage calculator. Residential real estate loan calculators can present guidelines on the expected amount but they are not 100% accurate. Banks and money lenders have varying interest rates for different types of real estate.
To use the online mortgage calculator, enter that amount of loan, interest rate and length of payment. Choose your preferred payment option: fixed rate, adjusted rate or balloon rate. All these factors will compute the possible fee that you would pay.