In the world of real estate, moving fast is sometimes not fast enough. That is why it is essential to have a reliable lender that is an extension of your team. Understanding the requirements of hard money loans and getting pre-qualified will help you solidify deals confidentially and close quickly.
From scaling your business to flexible terms, working with a hard money lender has numerous benefits. However, a borrower must provide some skin in the game as well.
Getting pre-qualified with your hard money lender enables you to start building the relationship with your loan officers and underwriting team. You will have a better understanding of what their maximum leverage is, closing timelines, credit requirements and what their overall appetite looks like.
So, what is the process of getting pre-qualified for a hard money loan?
Your first step in working with a hard money lender is to have a conversation with their loan officer or sales representative. Below is a list of pre-qualifying questions you should be asking.
- What are the minimum credit requirements?
- Is a business entity required?
- What type of loan programs are offered?
- What are the loan terms?
- Is an appraisal required?
- What kind of interest and points are involved?
- What if you have a partner on the deal?
- How quickly can you close?
If all goes well, your next step will be to start completing your pre-qualification file which includes the following:
- Complete an Online Application
- Providing basic documentation:
- Entity Documents
- Driver’s License
- Fulfilling the liquidity requirements
- The lender will most likely what to see you enough cash to close and payment reserves.
Once you have a property under contract, you will need to provide your purchase contract and scope of work for the anticipated rehab or construction. If you have been pre-qualified with your lender, then you are shedding days off the entire process. Your underwriting team values the effort you have put in and this allows them to move forward with processing your loan.
As the underwriting process continues, an appraisal report will be completed, credit report will be pulled, and title will be ordered. Your underwriting team will work diligently with you to meet the closing date.
From pre-qualifying to closing on your loan, the entire process involves several individuals all working with the same goals and objectives. As a lender, we want to become an extension of your team to help you succeed and scale your business.
If you have additional questions about our loan process and hard money requirements connect with the Coastal Equity Group team today! You may call us at 843-737-0182 or email email@example.com.