October 4, 2019
Many homebuyers find that traditional mortgage loans may not be the best option for them. Loans from large lenders often have limitations that may not serve all buyers, so a private money lender can become a great resource in these situations. Because private money lenders are privately owned they are able to offer more customized loans to buyers, especially those who are investing in a property or are renovating a property.
But not all private money lenders are equal, so it is important to find one that is a good fit for your situation. Let’s look at three things to look for in a private money lender.
Many private money lending situations involve a friend or loved one loaning money to the borrower, but for the purpose of this article, we will focus on private money lending companies. When looking for a private money lender one important thing to look for is a lender with experience in your type of loan.
Investors will want to look for a lender that has extensive experience with rehab loans. Not only does their experience help you navigate the loan, but it also can help you rest easy in knowing your loan is secure. When looking for a lender ask for information on the length of time they have been in business as well as their capital for investing.
Interest Rates and Expenses
In addition to experience, the available interest rates for your loan are a big determining factor when finding a private money lender. Over the course of a loan, a high-interest rate can add up to thousands and thousands of dollars, so it is important to search for the lowest rate possible.
In addition, there can be additional costs and fees for various things, such as an early payoff. If you are working on an investment property you should take care to understand if there will be any surprise fees should you finish and sell the property ahead of schedule.
If you are in the business of flipping houses, one great way to find a private money lender with a good reputation is to ask around in the professional community. While experience and costs are important, a good reputation is also important. By working with someone who has a good reputation and positive reviews in the community, you can rest easy knowing you won’t be taken advantage of.
Your Resource for Private Money Loans in Maryland
If you are in the market for a private loan for a renovation or rehab project, call us at Maryland Private Mortgage. We specialize in hard money and construction loans in Baltimore and we’d love to discuss your next investment with you. Call us today to speak with our lenders about your investment and how we can help you be as successful as possible.
The Maryland Private Mortgage Lending Team