Private financing involves loans with hard money lenders. This type of financing can be an option for people wishing to tackle a home renovation project, buy a house, purchase a new vehicle, embark on a special vacation, or any number of additional needs. Securing this type of loan involves specific steps.
Count the Cost
Before proceeding with a transaction, consumers must consider the terms. Interest rates are typically higher with this type of financing. It is also likely that borrowers will encounter shorter payback periods with higher monthly payments. Hard money lenders typically require collateral such as a deed of trust as security.
Borrowers must explore options for private lender companies. Research specific organizations and request quotes from a minimum of five different lenders before proceeding.
Consumers must also prepare proof of creditworthiness and income to provide to the lender.
Borrowers should also be ready to negotiate terms to try to get the best loan and rate.
The final step involves completing the documentation and executing the contract. The borrower will then receive the funds and service on the loan amount will commence.