How To Find And Choose HM Lenders?
Not too sure where this message should go but....
What kind of suggestions can you offer for FINDING and CHOOSING hard money lenders?
When I use the lender search on this site to find a PA lender, it brought up a list of about 75. But guess what about 60 of those are for the SAME person and when I contacted her for info, she told me that she doesn't do PA loans.
Of the remaining listings, most were associated with http://www.ELoanDealer.com.
This doesn't give me a lot to choose fromm. In addition once I DO find PA lenders, how do I decide with whom to apply? With all the ID theft that's going on, I don't want to give my SSN and other personal info to just any Joe Shmoe out there.
TIA[ Edited by doni49 on Date 05/29/2004 ]
Here in CA I have found then thru the websites and by networking.
By tracking down loands that were in default, I ended up finding the HM lender that originated the loan.
By HM Lender, I meant HARD MONEY Lender.
And as far as networking goes, I'm new to REI and don't really have anyone to network with.
I've been "lurking" here for quite some time. But within the last few months, I've been actively looking for deals. But I'm hoping to have a couple of HM lenders to whom I can turn when I find a deal.
Thx.[ Edited by doni49 on Date 05/29/2004 ]
1 yr. ago I did have contacts either.
Look in the paper, web, local clubs, talk to brokers, mortgage broker, they can all give you tips.
I was very shy at first, and then really learned to just ask.
What state are you in?
Is HM illegal there for some reason?
doni49,
The easiest way to find a HML is to visit the closest large REI group and sit in on one of their meetings. Speak to a couple rehabbers and ask them who finances their projects. Since you live in PA, I would find one in Phillidelphia or Pittsburgh and take a short road trip to visit. Another source would be local banks. I have one in Dallas that lends at 8.5% @ 80%LTV with no points. Can't beat that with a stick. Once you find a few recommended lenders, i would shop their rates and see who has the best program. Most HML rates are quite high, so do your homework and get the best deal.
As far as the listings on this site go, they are generally very out of date and are 3rd party people looking for referals. I tried to use a few lenders here and TX and got bounced around to 2-3 different people before I got to the real person running the show.
-Chris
[addsig]
Thx guys.
I don't know if HM is illegal in PA--I never even thought about that as a possibility.
I think those sound like good suggestions on how to FIND HML's.
Assuming for a minute I've found a few, how would you go about screening them? When I apply for funding, I'm going to have to provide some pretty sensitive info. And like I said, with all the ID theft going on, I don't want to give that info to any Joe Shmoe.
The best screening is done through referals. If you know (or meet someone) who has done business with a company, ask them how things went. See how long it took to close and if all their calls were returned promptly. Stuff like that.
I wouldn't concern yourself with identity theft. It does happen every day but the odds of it happening to you aren't very high. In this day and age, if someone was out to get you they could obtain that data fairly easily without posting as a hard money lender
-Chris
[addsig]
Tia,
Here are some specific things you'll want to know from your HML candidates...
1. What are the terms?
2. How much advance notice to they need to produce funds?
3. What is the maximum LTV they will lend on?
4. Will they need to run a credit check on you? (If so, will they furnish you with a copy?)
5. Will they need verification of your income?
6. Can they provide you with a prequalification or preapproval letter if you request one?
7. Are there any areas around town or type of properties they will not lend on?
8. Will they lend money for rehab and/or closing costs?
9. Just ask them point blank if there's anything else you need to know (being new is not a crime nor usually a hinderance...most will want to deal with you anyway if you're finding great deals with enough equity to secure their position).
You might also check with some local closing attorneys/title companies to see if there's any HML's they recommend (since they handle the closing documents for the lenders).
Oh...you also might want to ask if there's any situation under which they might be willing to lend in a 2nd position (these are rare, but it doesn't hurt to ask). There may be times when you'll want to leave a 1st in place buying subject-to if the payments are low, and get a HML to fund your rehab in a 2nd position. Just make sure there's plenty of equity in the deal.
I asked my brokers & current lenders if they deal w/HML. My broker found one that does not take any personal info (GA). The loan is based on the property (70% LTV) & they will fund the deal w/in 2 weeks, 1st position only (haven't tried them yet, will let you know when I do).
I have always watched my credit very closely so I will pay premiums to protect it. I work the additional costs into the deal.
One approach is that they are shopping for a customer, not you for a lender.
You should be able to come to basic term and know which what you want to use.
HMLs may have to be license so it's the same risk as giving it to sally the mortage broker.
The tend to be pretty easy that if you say you're looking for a 1st, 65% LTV, on a SFR in this cirt, my mid score is YYY, they can pre-qualify you.
Quote:
On 2004-06-05 16:43, cjmazur wrote:
HMLs may have to be license so it's the same risk as giving it to sally the mortage broker.
Thanks--I didn't know that. I thought HML's were mainly private lenders (as if I were to lend you money out of my own pocket) and weren't licensed.
One approach is that they are shopping for a customer, not you for a lender.
You should be able to come to basic term and know which what you want to use.
HMLs may have to be license so it's the same risk as giving it to sally the mortage broker.
The tend to be pretty easy that if you say you're looking for a 1st, 65% LTV, on a SFR in this cirt, my mid score is YYY, they can pre-qualify you.
???