Tips on Recognizing Fraudulent Hard Money Lending Practices
Hard money lending sector includes giving out high-interest credits. However, the industry faces many deceitful lending practices as well. Many cases have been reported of clients getting conned of their money due to prejudiced contracts. Thus, it is always advisable to be careful while taking a hard money credit.
Here is detailed information on various points to be kept in mind while considering the option of hard money loans. These points would lend you a helping hand in recognizing deceiving hard money lending practices.
Inclusion of Loan Points in the Specific Contract
The structure of issuing the loans marks the difference between the traditional loan industry and the hard money lending sector. When in some cases, the hard money creditors borrow a page from the traditional lenders and then charge the loan points. However, it is always advisable to take a loan from someone who is not charging loan points. Normally, lenders require loan points to buy down the interest rate and then house dubious credit. The concept of hard money loan is based on the fact that there is no need of good credit score to get qualified for getting a loan. Thus, you need to question any hard money creditor who charges you loan points before handling your application.
Dubious hard money lenders charge an exorbitant fee which needs to be considered before taking a credit. However, some fees are already related with the loan process, one should definitely not pay excess fees if asked by anyone. It is always better to be careful of the suspicious lenders who add unseen charges, especially in cases of an urgent need. One should always compare fees asked by different money lenders to get an actual idea of the market trend for various loan fees. Speak to other lenders and if you find out that your lender is robbing you by asking extra fees, maintain distance at the earliest.
Fees Charged Before Processing Loan
An authentic hard money lender will allow you to pay back the money at the back end. This is the reason why many hard money creditors set up their loans as balloon loans which means that you need to make interest only outgoings until the time you repay your loan finally. However, is one is able to pay a large amount from the loan; the creditor is more likely to accept the bargain.
We just sent you an email. Please click the link in the email to confirm your subscription!
OKSubscriptions powered by Strikingly