A Look At The Borrowing Process With Hard Money Lenders In Bucks County PA


Hard money loans are quite different than mortgages from banks so you may be curious to know what process you’ll follow with hard money lenders in Bucks County PA. They’ve cut down on the red tape and the process is much quicker and easier than applying for a mortgage, but there’s still a process to follow. Here are the seven steps of the borrowing process with hard money lenders.

Note: this is a typical process and it may vary from one of the hard money lenders in Bucks County PA to another. Use this as a guideline.

Step 1: Pre-qualification

Once you’ve selected a hard money lender, you can visit their website, call or make an appointment to find out how to pre-qualify for a hard money loan. Generally the lender will want proof of your assets and maybe access to your credit score. The result is a pre-approval.

Step 2: Find a deal and run your numbers

You’ll want a find a good deal for your first hard money loan. Be sure to run the numbers carefully and make sure your estimates are accurate. Use solid comparable sales for calculating your ARV. You want your first experience working with hard money lenders in Bucks County PA to be a good one.

Step 3: Apply for a loan with hard money lenders in Bucks County PA

Pre-qualifying allows you to jump more quickly into the loan application. You’ll be informing the lender of all the details of your deal: the purchase contract, your estimated cost of renovation, and your calculation of the ARV. If you’re less experienced with rehab projects and you plan to work with a contractor, the lender may require bids from the contractor as part of the application. Lenders have different ways of approaching this, but most will want a very detailed rehab plan and will define how the funding will be made available as phases of the plan are completed.

Step 4: The lender may carry out an appraisal or ask for one to be done

Usually the hard money lender will do an appraisal, but sometimes they may ask you to get a third-party appraisal done from a list of appraisers. If the loan officer is working with an in-house underwriter, they may decide an appraisal is not needed.

Step 5: The hard money lender will issue a written term sheet

The lender will set the loan fees, interest rates, and terms, and they’ll review them with you. There may be fees and costs which you’re required to pay upfront at this point. (Check with each of the hard money lenders in Bucks County PA to find out what their fees are, as they may vary.)

Step 6: The loan moves to processing

The borrower will be asked to submit everything needed to underwrite the loan, including the appraisal, preliminary title report, credit reports and financial statements. The loan will be closed by an attorney or title company.

Step 7: You close the loan

Finally you’ll sign your documents at a closing appointment, in a lawyer’s office or title company. The hard money lender puts the loan amount into escrow and the funds are properly disbursed according to the paperwork.

Again, these are a general guideline and may vary.

Following these steps, you will have funded your first flip deal with a hard money loan from one of the hard money lenders in Bucks County PA. Now the real work will begin! Each time you run through these steps it will get a little easier until it comes naturally. The benefits of working with loans from hard money lenders in Bucks County PA will lead to you becoming an expert in the process of securing them.

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