Finding the best hard money lenders in Florida can be difficult, but by following the tips below this task will be a little bit easier. The tips will help you sift the good from the bad and find the most appropriate lender for your business needs.
1. Locating the best hard money lender
It is vital that you don’t allow your desperation to lead you into making bad decisions and inappropriate deals with hard money lenders. While you may be in a dire situation, you should still do online research and find the best money lender for your needs. If you find yourself rushed for time, you may discover you are paying for a loan that is nowhere near value for money and there are plenty of these bad deals in the market. However, there are still some honest businesses such as Hard Money Lenders Florida around town offering affordable rates.
2. A non-recourse loan
When conducting research you will discover that there are two different types of hard money loans available to you: the recourse loan and the non-recourse loan. If you opt for the recourse loan you will be placing yourself in additional risk as the hard money lender will be able to repossess your house if you are unable to repay them. Furthermore, they will also be able to take legal action should you find yourself in this situation.
However, the non-recourse loan does not allow for legal action if you are not able to pay, but the lender is still able to repossess your house. Of the two the non-recourse loan is more favorable and you should check which loan you are opting for before signing the money lending contract. Don’t be conned into losing more money than you owe.
3. Winning with low points
If you are searching for a commercial money lender you will come across the term ‘points on a loan’. A point is worth 1% of the overall mortgage amount, which means one point on a $1,000,000 is equivalent to $10,000. Hard Money Lenders Florida will generally offer loans between four and eight points, thus it is unlikely you will ever find a loan offering one point. Always search for loans with lower points for the lower the points, the less you will be required to pay in the long-term. It is highly advised that you stay below five points or you will be swamped with costly and unforeseen fees.
4. Always know your terms
It is imperative that you know what you are signing, so be sure that you are 100% sure of all terms in the contract before you make your mark. There will be lenders who create loan structures designed to fail, particularly those with interest-only or adjustable rates, and you need to know how to identify these. You must also be sure of the exact amount that you will be paying immediately and over the duration of the loan. If a contract is open to change, it is unlikely to be beneficial and should be avoided at all costs. If there is a constant amount, there is also the possibility that the price may expand quickly and ultimately become too great to repay.