…But don’t shop too long.

We understand! You want to get the best hard money loan terms you can get, and to do that, you must contact multiple lenders. But shop around too long and you will lose the deal completely. We’ll take a look at how to get the best terms you can get and still close the deal.

We’ve seen it countless times: A borrower comes to us requesting a hard money loan for a purchase that is two weeks off. They fill out the loan app, get approved, get their terms and then nothing: radio silence. Then two days before closing they come back to us, frantic–another lender who gave them better terms fell through and they need us to close in 48 hours. Now, we’re fast, but not that fast. We still have to write and review loan docs, get final approval for funding and coordinate with Title. We tell them we can still close, but in five business days. They end up losing the deal due to timing.

This scenario is totally avoidable if you understand how hard money lenders work and the timing involved. Hard money is like cash, but it is not cash and certain underwriting steps must be taken. All hard money lenders have to do the following:

Hard Money Loan Timing

  • They must intake your loan application and run a credit and/or background check. This usually takes 1 day.
  • They must value the property to determine a loan amount. This takes anywhere from 1 day to 2 weeks if an appraisal is needed.
  • They must create and deliver terms. This usually takes 1 day.
  • They must create loan documents. This takes 1 to 3 days.
  • They must wait on the title policy from the title company. This can take up to 3 days.

There can be overlap here of course, but add that up. You’re looking at a minimum of 5 business days to close. And that is if everything goes perfectly. If an appraisal is required or there is an issue with Title, then that can drastically affect the closing date.

So shop around, but remember to give yourself at least a week before settling on a hard money lender. To be safe make it two weeks.

At Little City Investments we understand that you’re shopping for the best terms you can get. That’s why we will give you a preliminary term sheet immediately after you complete your loan application. We’ve been providing Texas hard money loans for over ten years, so you know we’ll deliver when it counts. Give us (at least) five business days, and we’ll get your deal done! Request a loan today.

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