There are different reasons why a bank may reject your loan.It could be employment issues, property risks, or poor credit history, but ultimately, a private money loan is your best solution. Here are some of the mistakes you should avoid so that your loan application runs smoothly.
Not Getting Pre-Approved Before Signing A Contract
If you’re looking to settle on a large financial investment,you need to be pre-approved for a loan. Before agreeing you should get pre-qualified by a lender such as LBC Capital LLC. You can even get a proof of funds letter to help you seal the deal and let the sellers know that you’re serious.
You don’t want to be in a situation where you make an offer on a property and have it accepted;then your loan request ends up rejected.
Letting the Interest Rate Be a Turn-Off
Interest rates for private money lenders can be as high as 12%, which is more than what is offered by banks.First, private lenders take more risk than banks when they enter into such agreements. Also, private money loans are interest-only payments, which mean that monthly payments are manageable.
The ultimate goal of private money lenders is to offer clients with fast, short-term solutions to help them complete their project. Once they’refinancially secure, they can move to permanent solutions with lower interest rates.
Not Settling On the Right Lender
Before you settle on a lender, you should get to know how long they’ve been in business, what they require for your loan application and their payment plans. Most of these questions can be answered at any of your local hard money lenders office.
Take time to visit their website and check out whether they’re transparent or can answer your questions upfront. A private loan contract is just like any other business partnership. You’ve got to be committed to the end of your agreement.
Not Paying Attention to Additional Costs, Penalties or Fees
Always read the fine print before you sign any deal. You don’t want to be liable for mistakes or incur any unexpected additional costs you weren’t aware of. Before you proceed with a lender, get to know whether they require a bi-weekly payment.
Understand their loan-to-value ratio as well as whether or not they charge a prepayment penalty. This way, you’ll avoid heartache down the line.
For more details visit - https://www.hardmoneylenders.finance
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