Hard money loans are not a relatively a new concept in lending. The lender offers loans based on properties that usually don’t qualify as proper collateral for a conventional lender. This can be because of foreclosure, bankruptcy or property damage. Higher interest rates areusually charged. Identifying pretend lenders will help you avoid losing money and property.
Avoid solicitors or lenders that call you. While some may be legitimate as hard money lenders Florida, it is still best to avoid them. They may have previous knowledge of some issues with your property and may be preying on your exposed vulnerability and financial state. It is also suspicious that they have your contact information, especially when you have not processed an application previously.
Do your research on the lender, speak to others he has funded loans for. . Some illegitimate companies do not operate like a regular business but merely have call operators handling financing over the phone but dont have funds to lend and charge a huge upfront fee just to look at your deal. Scams are easily perpetrated on these types of businesses. Seek out a company like hard money lenders Florida instead for recommendations.
Beware of loan terms changes at closing. Loan terms often change but it is the responsibility of the lender to discuss the terms and the changes with you and get your consent to proceed. A sure sign of a scam is changing the terms to favor the lender during the closing period, especially at the closing table when they know you will close no matter what!
Be wary of good faith deposits. These are usually secured by lenders to show that a customer is interested in a hard money loan. Scammers will demand this payment up front without knowledge of the borrower’s situation or property. However, an attorney deposit is becoming more the norm in attorney states.
Always ask for recommendations from any lender. Require testimonials from previous customers or reviews or reports from other lenders such as hard money lenders Florida. A scam artist usually would not have references or refuse when asked to provide this information.