Eliminate Your Fears And Doubts About Hard Money Loans
No one really knows what the outcome is going to be when applying for a loan. To be realistic it could turn out in a positive or not so positive. It all depends on how much the borrower wants to borrow, his/her credit, how much collateral they have, etc.
Doubts and Fears about Hard Cash Loans
A huge concern for many borrowers is that they feel their credit will be denied. However, hard money lenders do not rely on credit scores alone. Actually, most hard money lenders do not consider them at all. So, if a borrower has a score of below 500, he/she will most likely still be approved.
Fort Worth hard money lenders attempt to give every applicant a decent chance. One way this can be done is to suggest references. Three good financial references can go along way when it comes to obtaining a loan.
This is good news for many borrowers who may feel they may not qualify. The fact that traditional mortgage lenders require at least a 700 score may be why most borrowers have this doubt. However, some traditional banks use a more lenient formula which includes a score of at least 620.
Hard money lenders do not put much interest on the credit score. However, they do put a good amount of interest on the ability of the potential borrower to have enough collateral and the ability to make the down payment. What many borrowers may not realize is that as long as they can come up with the collateral, in most cases they will be approved.
Hard money lenders are more apt to give chances to borrowers who may not be as appealing to other lenders. Now, when it comes to having enough collateral the average property owner may be unaware that hard money lenders will accept property that is not real estate. For example, retirement funds, boats, cars may all be accepted. Fort Worth hard money lenders understand that property is the property and all property can be worth money.
This can be a sign of relief for many borrowers who may find themselves coming up short when it comes to collateral value. Even businesses being used as collateral are acceptable. Traditional mortgage lenders are not this lenient. They will mainly only accept property real estate, such as homes and land.
Another fear that some borrowers may have, concerns underwriting fees. Underwriting fees can be confusing and expensive. An origination fee is one type of fee. This is used towards the opening of the loan account.
It could be as much as 1% of the loan. Appraisal costs can be as high as 1% of the total cost of the home. Of course, appraising a home is carried out by professional appraisers.
And then there are other fees such as credit check fees and other fees. Many borrowers become anxious at the accumulation of charges. However, a good number of hard money lenders, if not all, are open to waiving or reducing some of the charges.
In many cases, the private lender may simply hold the fee to be added to the closing costs. Traditional mortgage lenders are not known for waiving fees very often. However, that’s not to say that it doesn’t ever happen. As hard money lenders there are a good number that will allow charges to be held to be paid at closing.
Waiting to add some of the charges to the closing costs can ease some of the stress. The potential borrower does not have to be concerned with finding cash in the middle of the loan process. Only once the loan process is over, are charges required.