When submitting loan requests to a private lender, it is important to provide as much information as you can to get a quick response and ensure that your deal is funded. Hard money and private mortgages do typically don’t need all the documentation banks need, but the more information a borrower can provide, the better chance they will have at getting their loan funded. Use the below 5 tips as guidance for how to best approach a private lender.
- Prepare a comprehensive loan package: A comprehensive loan package should include all the necessary financial and property information to support your loan application. This includes financial statements, rent rolls, property details, and any other relevant documents. Be sure to include all required documents and ensure they are up-to-date and accurate.
- Build a complete borrower profile: Private lenders and hard money lenders may be more willing to lend to borrowers when they have a complete story including the borrower’s credit score, income, and experience in the industry. Be sure to provide a complete and accurate picture of your financial and professional history.
- Be prepared for a higher interest rate: Hard money loans and private mortgages may come with higher interest rates than traditional bank loans. Be prepared for this and factor it into your overall financial plan.
- Communicate openly with your lender: Good communication is key to a successful loan application process. Be sure to communicate openly and honestly with your lender, provide all necessary information in a timely manner, and be open to negotiation on terms and conditions.
This can help build a strong relationship with your lender and increase the likelihood of approval for your loan.
- Understand your options: Before submitting a commercial real estate loan application, it’s important to understand your options. This includes researching the various types of loans available, including traditional bank loans, hard money loans, and private mortgages. Understanding the pros and cons of each type of loan can help you make an informed decision and choose the best lender for your needs.