6 Items You Need to Close a Rehab Loan Fast
Because so few banks will lend on vacant properties in need of repair, it is often a hard money lender that will finance a rehab loan instead of a bank. Every hard money lender has a particular list of requirements needed to close a rehab loan. If you are motivated to close a rehab loan quickly, here are some specific items you should have ready or on hand:
1. Purchase Contract & Escrow Instructions: If it’s a purchase loan have the purchase contract and escrow instructions if provided, and give them to your hard money lender.
2. Bid for Repairs: Even if you’re doing some of the painting and odds and ends yourself, make sure you have a bid for repairs to give to your hard money lender.
3. Photos of the property: Take photos of the property to give to your lender. Particularly those areas of the property that will be repaired or updated.
4. Basic Loan Application: Not all hard money lenders will require a loan application for a rehab loan, but check your lender’s website to see if an application is required.
5. Proof of Hazard Insurance: Get with your insurance agent and have a quote for hazard insurance ready for your hard money lender.
6. Preliminary Title Report: A hard money lender will always want to order a preliminary title report. If you have one of these available, provide it to the lender. Do not order one yourself until you confirm with the hard money lender that it is ok to use your designated title company, or the seller’s title company.
Because every hard money lender has its own set of requirements, make sure you are well versed on your lender’s specific requirements. The more you know, the faster you will close your rehab loan.