When credit history is an issue with getting a traditional loan, one option is to work with a hard money lender. Hard money loans in Texas are readily available, but you want to make sure the organization you deal with is legitimate. How can you tell? Use these three criteria to make sure the group you’re working with is trustworthy and will provide for you the service you deserve.
They Check Your Credit
A big selling point for hard money lenders in Houston, TX, is that they don’t get hung up on credit reports. As long as you have a valid and stable source of collateral (hard assets like real estate), you’ll generally be able to qualify with hard money loan lenders. But that doesn’t mean they shouldn’t check your credit. You want them to at least look into your background. Every hard money loan lender you talk with should conduct a background credit check, even if the credit rating doesn’t matter or your history of repayment won’t factor into their decision.
They should make an effort to discuss how you will repay them and establish repayment guidelines for you. If they don’t check your credit or don’t seem interested at all, you may want to look at alternatives. A red flag they’re more concerned with moving money than with getting repaid is that they pay no attention to your history and if that’s the case, you should be concerned.
The key here isn’t how long they have been in business, but their loan volume. While a hard money lender that has been in business for a while is a good sign, if they haven’t distributed many loans, it might be a red flag that they’re stricter than your average hard money loan company. It also could be an indicator that their ability to secure investment capital is limited.
What you want is a company that has a steady history of approving hard money loans, and if possible, you want them to have many repeat customers. Repeat customers mean that they’re well regarded enough to gain repeat business. Another indicator they’re reputable is if their stable customers include known and well-regarded construction companies, developers, or real estate brokers. This is an indicator that they’re able to turn loans reasonably quickly and reliably. Securing a short-term hard money loan is often the difference between closing a deal or finishing a project. That’s why it’s crucial for hard money loan lenders to have reputable and consistent customers.
The only thing that serves as a good reference better than repeat business is customers who go on record supporting you. The hard money lender you work with should have a stable slate of customers who will vouch for the lender. If they have a high volume of repeat business, you can rest assured they’re well regarded.
Hard money loans can be a lifesaver if you can’t get a traditional loan. Making sure your lender is reputable is critical, and these three criteria will help you do that. For more information on hard money loans, check out Investor Loan Source.