Submitting a hard money loan can feel like an intimidating task for real estate investors looking for funding. But if you know how to submit a hard money loan, it’s easy! This blog post will give you the necessary insight on how to effectively submit a hard money loan that will increase your chances of approval and help you get the funding you want.
Using a basic loan summary to submit hard money loans to your lenders is key to successful loan submissions. By following these steps that I outline in this article, you’ll receive the best possible outcome and get funded fast.
To submit a loan to a hard money lender to get a yes or no answer quickly, you need a loan summary and photos. If the property is a fix and flip, you’ll also need your comparables to support your after repair value and an estimated rehab budget.
Here’s your cheat sheet, check this out! Below is a basic “loan summary” and it includes all of the information that a private money, hard money lender will need to give you a yes or no answer. Lenders are busy, and so are you, so use this form to give them a snapshot of the loan, to see if it fits in their parameters.
The below loan summary includes the most important details about the property and the deal that you need funding for such as property address, property description, property value, etc. When a private money, hard money lender gets this loan summary from you, you are going to get his/her attention and you’ll definitely get a yes or no answer quickly. Providing a loan summary to your lender also shows that you’re organized and on top of your game.
What is the most common mistake that borrowers make when submitting hard money loans? It’s so simple that you’ll be surprised to hear that it’s just….property photos! Yes, people almost always forget to send property photos when they are submitting a loan to a private money, hard money lender for approval. Even if you have just one, front, exterior photo, send it to your lender along with this loan summary. The more photos the better!
Keep this tool in your toolbox because you’re going to need it if you want to get funding fast from a private money, hard money lender. And if you have any other questions about loan submissions to hard money lenders, leave them in the comments below.
Property Address: This is the physical address of the property that the loan will be used for.
Property Classification/Type (Residential or Commercial?): This is the classification of the property, whether it’s a residential or commercial property.
Property Description: IF RESIDENTIAL: # of beds/# of baths/sq footage, lot size, garage? Year built? This provides details about the property such as the number of bedrooms and bathrooms, square footage, lot size, garage, and the year it was built.
Property Description: IF COMMERCIAL: How many buildings? Total bldg. sq. footage, acreage, year built. This provides details about the commercial property such as the number of buildings, total building square footage, acreage, and the year it was built.
IF PURCHASE: List purchase price or offer price: If the loan is for a purchase, this will list the purchase price or the offer price for the property.
IF A REFINANCE: List amount of debt to be paid off with new loan requested: If the loan is for a refinance, this will list the amount of debt that the borrower wants to pay off with the new loan.
IF A REFINANCE: Amount of loan fees/ interest reserves requested in addition to base loan amount: If the loan is for a refinance, this will list the additional loan fees or interest reserves requested in addition to the base loan amount.
IF REFINANCE: When purchased? For how much? This will list when the property was purchased and for how much it was purchased.
List amount of repairs or rehab: This will list the amount of money that will be used for repairs or rehab on the property.
Property Value: (based on?) This will list the value of the property, based on an appraisal or other valuation method.
Current lien(s) if not applicable please put, n/a: This will list any current liens on the property, if applicable.
Loan Term Requested (How long do you need a loan for?): This will indicate the length of time that the borrower needs the loan for.
Exit Strategy (How do you plan to pay the loan off?): This will list the borrower’s plan for paying off the loan, such as through refinancing or selling the property.
Use of funds: (Please provide brief breakdown of the loan needs): This will provide a brief breakdown of how the loan proceeds will be used, such as for purchase, repairs, or refinancing.
How soon needed by: (Is there a contract date we should know about?) This will indicate the date by which the funds are needed, such as if there is a contract date to close on a property purchase.