Everything You Need Before Applying for a Real Estate Hard Money Loan

 


Hard money loans are a very popular real estate financing option. Unlike traditional bank loans, hard money loans are quick and easy to get approved, allowing you to capitalize on opportunities that present themselves. They have physical property as collateral which often simplifies the loan process and makes it easier for borrowers to get loans. If you’re planning to get a real estate hard money loan, here are all the documents you might need.

Purchase Contract

It’s important to have a purchase contract if you’re buying the property. In case it’s a refinance loan, you might need a pay-off statement from the existing lender. As the loan will be given against the property being bought, you need to give evidence for the purchase of property for it to be taken as collateral.

Preliminary Title Report

The title report is very important. It shows the ownership and confirms the transfer of title for the property. The designated title company will provide this for the loan.

Two Forms of Identification

Any two forms of identification should do for individual borrowers. If a company is taking the loan, they might have to provide the following:

· Corporate documents

· Operating agreement

Certificate of Good Standing

If the borrower is a company, they might have to submit a Certificate of Good Standing. This document provides proof that the company is registered with the state.

Proof of Funds Statement

This is required if it’s a purchase loan. This is proof that the borrower has enough funds for the down payment of the property. A recent bank statement can work as a proof of funds statement.

Proof of Insurance

Only required if it’s a purchase or refinance loan. The property, being taken as collateral, has to be insured.

Other Items

Some other documents that may be required depending on your type of loan and private lender’s requirements are:

· Loan application

· Copy of lease

· Credit report

· Rent roll (in case of rental property)

These documents can vary from loan to loan and lender to lender. If you’re looking for real estate hard money lenders, contact Insula Capital Group. They’re private lenders for real estate that can provide quick real estate financing for your fix and flip and construction projects. For more information about hard money lending rates and requirements, visit their website.

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