If you are a real estate investor looking for hard money lenders in Milwaukee WI, you should familiarize yourself with some of the terms they use, in order to make sure you end up working with professionals. Such loans can be very useful in terms of saving a great rehab project from falling apart. For this reason, it is always best to be prepared in advance and make sure you will get your loan application approved rather than losing everything because of small details.
Fees You Might Have to Pay to the Hard Money Lenders in Milwaukee WI
Just like when getting another type of loan, you will have to pay a number of fees. These fees vary from one state to another and from one lender to the other, but, in Milwaukee, you will most likely be asked to pay the following:
- Processing fee – These days, processing fees are common in almost all fields. If you apply for school, you need to pay the administration staff for reviewing your papers; if you apply for a loan from the hard money lenders in Milwaukee WI, you have to pay them for processing your application, your means to repay the loan and the risk of default.
- Wire transfer fee – Unless you prefer to receive the money in cash, you will have to pay a small amount of money for the loan to be transferred to your bank account; it is usually a small percent of the loan amount and it should not cost you anything over $100 at most.
- Underwriting fee – The approval you need, or the rejection in case you do not meet the lender’s requirements will not come for free. The fee you have to pay is usually a little higher than the processing fee, somewhere around $100-$200.
Situations in Which the Hard Money Lenders in Milwaukee WI Will Lend You the Money You Need
Hard money lenders, at least those that want you to be able to repay the loan and are not after your property, will want to know what you are going to use the money for. They will only lend you the money you need if you are going to use them:
- To build, purchase or rehabilitate a commercial property;
- To flip homes (buy properties in a precarious conditions, rehabilitate them and put them back on the market);
- To rehab or stage homes properties before putting them on the market;
- To cover your short term financial needs until you secure a more accessible form of financing.
In all of these cases, you will have to use the property you are investing in or another one on your name as collateral. Also, keep in mind that the hard money lenders in Milwaukee WI only offer short repayment terms and they apply interests higher than those of regular mortgage loans, so you should only borrow from them if you know you can pay them back in time and make profits that will cover the costs of the loan.