3 Common Mistakes When Securing a Loan for a New Property
Purchasing an investment property can be exciting, but choosing a reliable financing solution to afford the home of your dreams can be difficult. This is especially true if you reach out to conventional lenders with strict criteria. In addition, you may get funds less than the amount you requested if your loan gets approved.
Since you are less likely to get financing from a bank, consider hard money lending. Unlike financing solutions offered by banks, you can easily acquire the investment property you plan with fix and flip loans. This option is also ideal for you if you need quick cash and want to do more deals as a competitive real estate investor. To avoid any costly errors, here are some common mistakes to avoid when using it as your funding source for a new property:
Not getting prequalified
Getting prequalified for hard money lending should be your priority because this will appeal to sellers and make the purchase process quicker. They are some of the best loans for house flipping because the loan approval process is fast. You can also avoid the paperwork involved and processing of a loan and have the ability to negotiate a better price.
In addition, having pre-approval provides you with the cash you need to start buying materials and supplies, working with contractors, and completing the actual project. Thus, you can save time and money.
Failing to build a relationship with your lender
Dealing with banks is straightforward because the entire transaction can be treated as a swap. You have to present your credit score and information, and then the bank offers you a certain amount. That is not the case with hard money loans. The relationship between you and your lender is more crucial. They will view you as a worthy investment if they know more about you and your project.
Hard money lenders also understand the industry and are knowledgeable about state laws. Since they likely know the market better than you, it’s best to communicate and work with them harmoniously so they can give you professional real estate investing advice, particularly about different properties or projects in your area.
You can easily establish a relationship if you reach out to our hard money lenders in DFW. Aside from our dedication, skills, and experience, what makes us different from other private lenders for real estate is our investor’s mindset. We understand and relate to your goals to help you determine which investment opportunities are best for you.
Getting excessively concerned about the interest rate
A hard money interest rate may be high, but it isn’t all that much. Your lender risks the terms you get, like letting you enjoy a quicker process than if you went through a bank, secure you a loan if you have bad credit, and get access to immediate cash upon approval and money with no risk to your credit score.
Hard money lending maybe your best financing option so you can purchase your investment property. To be a competitive property investor, remember the common mistakes listed above and avoid them at all costs. Reach out only to trusted lenders to ensure you get the cash you need for an investment fast and conveniently.
Earn more on your deals by exploring hard money loans in DFW by DFW Investor Lending, LLC. We offer fair interest rates and can also guide you from deal evaluation to closing on the sale. Contact us to discuss your great money lending needs!