The Hard Money Lender Checklist
How to know if you are working with a reputable hard money lender.
For real estate investors searching the internet for hard money lenders in Maryland to fund their deals, it is often difficult to separate the reputable private lenders from the ones with questionable backgrounds and tactics (or are not even direct lenders at all). At the same time, many investors base their research entirely on the cost of the financing instead of analyzing the true differences between firms. The cost of doing business with a hard money lender is more than just interest rates and points – the right lending partner can be influential in helping you turn a profit and scale your business.
To help investors identify the right hard money lending partner for their business, there are a few questions that should always be asked.
What range of rates are offered by the hard money lender?
We’ll get this out of the way first, since it is often one of the first questions real estate investors ask a hard money lender the first time they speak. It is common for hard money lenders to charge an annual interest rate, with interest-only payments per month, and points paid at closing. In the current market conditions, qualified investors may find lenders offering interest rates ranging anywhere from 9%-15% with 1-6 points
It is important keep in mind that a good hard money lender is about more than just rates and points, and slight differences in these costs can often be offset by added value elsewhere.