Do hard money lenders require an appraisal?

Most hard money lenders prefer to have an appraisal since they provide them with a professional opinion regarding value. However, some files are time sensitive and just don’t have time for an appraisal to be completed. That being said, some hard money lenders prefer to have appraisals for their analysis and NextGEN lenders have the flexibility to make decisions without one.

What is the approval process for a hard money lender?

There are basically four steps in the approval process for hard money lenders. The borrower (or a representative for the borrower) runs the scenario with an account executive. If the scenario is acceptable to the hard money lender, the company requires a complete loan submission.

How long does it take to put the loan together?

Many companies generally ask for a minimum of 10 days from the time they receive the loan submission until closing, though some can close faster to accommodate special circumstances.

As a mainstream mortgage broker, I don't see much of this type of thing. Why should I be interested in private money?

Some believe that mainstream mortgage brokers are being squeezed out of the industry. Lenders are ramping up their operations to better provide online loan sourcing directly to borrowers. Many saw a similar thing in the travel industry over the past years. The travel agents that have survived and even thrived, are the ones who effectively established niches within the industry. Some believe that the same will be true for mortgage brokers. Plain vanilla loans can be easily processed in an assembly line fashion which easily translates to the world of the novice and a web browser. Niche lending, on the other hand, tends to be a hand-crafting of sorts and cannot be easily automated. Look at private money to help build your niche. There are no absolute rules. Many factors must be considered in making a decision and frequently those factors are intangible. Ultimately a high degree of thought, work, and commonsense is involved. Private money will always be a people process. So if you say, "I am not interested in private money because I don't do unusual loans," some will tell you, "You might want to reconsider." When you reconsider find out ahead of time if they are a NextGEN Lender. When people matter, NextGEN is a must.