Whether you are thinking of getting loans from a traditional bank or from hard money lenders, there is a possibility that you will deal with scammers if you do not exercise extreme caution during the selection process. You have to fully understand how hard money lenders in Florida operate especially if you intend to get a loan in this state so you will have an easier time deciding which among them can provide you with the most trustworthy services. Note that most hard money loans are usually issued against a piece of real estate. It is best for you to acquire this kind of loan especially if you intend to buy real estate properties with the intention of building other properties on it or selling it for profit.
Hard money lenders in Florida usually offer balloon loans to potential borrowers. This is a unique loan structure which enables borrowers to make small payments during the loan’s term. After reaching the maturity date, borrowers are often required to pay a lump sum so as to completely resolve the obligation. This structure benefits lots of borrowers because this gives them enough time to make the necessary preparations for the last payment. In most cases, balloon payments are only offered to hard money loans that last for one-two years so borrowers will have enough time to prepare the money to fully pay the loan.
As a means of ensuring that you deal with hard money lenders in Florida who won’t subject you to encounter a fraud in the end, it is crucial for you to check out the upfront fees that they require borrowers to pay. In normal cases, the upfront fees that you will need to pay are the appraisal, attorney fee and title and possibly a site inspection for a commercial or rehab deal. This will let you know if you are dealing with a fraud and start looking for a more trustworthy one