Choosing a lender often starts with a question about interest rates and closing costs. However, remember that buying low may help you increase your bottom line but it should not be your most important consideration. If you want to close with the best possible deal, do not be afraid to ask these questions:
1. “What are my qualifications as a borrower?”
At the minimum, you should know your credit score and how much money you can come up with towards closing fees. Evaluate your own capacity to pay based on your monthly liabilities and your gross income. Knowing your loan application’s strengths and weaknesses will most likely lead you to the right lender for you.
2. “Is underwriting done in-house?”
After submitting your loan documents, the underwriter reviews your loan application and determines whether additional items are needed. Some lenders might need to send your files to another office or state to do this. Others may even have to go through several layers of approvals before they can make a decision. Speaking directly with the decision-maker will serve you well and hasten your transaction.
3. “How many days does it take before closing?”
The average turnaround time to close a hard money loan for investors is about 20-30 days. This is considering that there are more documentation requirements when the loan is for an investment property. A loan application that takes longer can certainly make your seller impatient and may cost you the deal. Determine how long it takes to close the loan which may also justify any rate premium for a faster closing time.
4. “How often will I get updates on my application?”
You probably want to close your deal as quickly as possible. For this reason, receiving regular updates in your preferred manner will give you peace of mind and more control over your timeline. Ask your lender how they plan to communicate with you to know whether they are a good fit for your needs.
Many lenders have similar loan programs and may only have a slight difference in their rates. A lender who is easy to work with and can tailor-fit their program according to what you need is well worth considering. When choosing a lender, make sure to talk to as many people as your time allows before you make the commitment.
GL&L Holdings is a family-owned and run hard money lending business. We do our underwriting in-house so you don’t have to go through complex corporate evaluations and approvals. Closing is typically done within 15 days and we can tailor-fit a loan setup for you to accommodate your needs.
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