Welcome to the final part of our series on “Ask a Hard Money Lender”! If you missed part 1, click here to check it out.
In this article, we’ll talk about five more important questions you should ask a hard money lender before you decide whether they’re right for your flipper or new construction business.
We’ll also share our own answers because we know how valuable your time is. We want to give you as much information as possible to help you make an informed decision.
Let’s get started.
Here are five more questions to ask a Hard Money Lender…
Question 6: Do you have other fees?
Sometimes lenders, even hard money lenders, aren’t as forthcoming as they should be when it comes to the fees they charge. It can become a real problem once you get your project going.
Don’t you hate when bills pop up, seemingly out of nowhere and you must pay for things you didn’t plan on?
So do we.
That’s why you won’t find hidden fees with us. We have a $595 doc fee, which is industry standard, and that’s it. No junk fees, no appraisal fees, no hidden surprises to jump out and bite you later.
Question 7: Do you have a prepayment penalty?
The sooner you’re able to close on your loan, the less out-of-pocket you’ll be. A shorter loan means fewer interest payments, which sounds like a win-win!
If you have to deal with prepayment penalties, however, it could cost you more money in the long run.
You’ll never have to worry about prepayment penalties with Loan Ranger Capital. We don’t want you to have to pay more than necessary to get your project funded and sold.
We work with you to ensure your entire loan process goes as smoothly and quickly as possible because we know the sooner you sell your property, the sooner you can start on a new one – and the more money you can earn!
Question 8: What are your terms? Including rates, points?
One of the most important things you should know before choosing your hard money lender is how much you’ll be paying them in terms of interest rates and points.
We at Loan Ranger Capital pride ourselves on being flexible on terms. Interest rates and origination points vary from loan to loan but typically fall between 11.9% and 13.9% for rates, and 2-3 points.
Question 9: How long is the repayment term for your loans?
Even with the best-laid plans surprises can pop up and derail your project. It’s important to know if your hard money lender is willing to be flexible on loan term – just to be sure.
Just like on our rates and points, we can be flexible in loan length. Our typical loan between 6-12 months, but we’re happy to discuss a different length.
We want to work with you to help you get exactly what you need out of your loan!
Question 10: Do you charge interest on the entire loan amount or just what’s been used so far?
In order to know how much you’ll be spending each month on your interest, you’ll first need to know if you’re paying on the full loan amount or only what you’re currently using. Some lenders require you to pay interest on the full amount from the very beginning, but not Loan Ranger.
Here, at Loan Ranger Capital, you only pay interest on the money you’ve used so far. It’s just another way we make sure you’re not paying for the wrong things. We want the loan process to work for you, not to cost you more.
There you have it! The most important questions to ask a hard money lender before you decide who you’ll do business with. We know you’re putting you all into your business so it’s important to choose the right lender. If you have any questions that we didn’t cover here, let us know! We’d be happy to answer them for you.