Choosing a Hard Money Mortgage Broker

Getting a hard money mortgage might help you get through tough financial times. When considering a hard money mortgage, you need to make sure that you choose the best broker that is available to you. Here are the basics of how to choose a hard money mortgage broker successfully.

Hard Money Brokers

A hard money loan is one that takes place outside of the normal lending environment. You will not be working with traditional lenders such as banks or credit unions. You are going to be working with an individual that makes loans out of his or her own money. Therefore, there are not the lending standards that you are accustomed to with traditional lenders. Every hard money broker is going to be different and have his or her own policies. This means that you need to do your due diligence when selecting one.

Licensed in Your Area

When evaluating hard money brokers, one of the first things that you need to do is make sure that they are licensed to do business in your area. Hard money brokers are typically licensed in only a few geographic areas. This means that you need to determine whether or not a given broker can legally lend you money in the area in which you live. Most brokers will volunteer this information up front, but you may have to ask others.

Interest Rate Comparison

When you are looking at different hard money brokers, one of the main areas of emphasis should be the interest rates that they offer you. Hard money brokers are notorious for charging their customers very high rates of interest. Hard money lenders know that they are often the last option available for a client. They are more than willing to take advantage of this situation by charging very high rates of interest compared to those of traditional lenders.

The interest rates that are charged are typically based upon the individual's desire to earn a certain rate. This means that there are no industry standards as far as interest rates are concerned. The interest rates of one broker might be substantially higher than another. You need to make sure that you compare all of the interest rates against each other so that you can make sure you get the best deal. You are going to be paying fairly high interest regardless of which option you choose, so you need to save as much money as you can by choosing the lowest rate that is available.

Available Terms

You also need to look at the terms that are being offered to you by the various hard money lenders. Hard money brokers will offer a variety of different lending programs. Many of them are very flexible depending on your situation. You need to look at the different terms and choose the one that best fits your needs. For example, some hard money brokers will charge a prepayment penalty. If you are planning on refinancing this loan in the next year, then this loan would not be your best option.

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