As a Mortgage Broker who works with several Hard Money and Private Money Investors it seems my phone is ringing more than ever, with questions about this type of financing.  (Which is a good thing)  It just seems so many people who come to the realization that they need this type of financing really don't know what to ask or what to expect when inquiring for this type of financing.

Below is some basics that you should ask your Licensed Full-Time Mortgage Professional.

• How many Hard Money / Private Money Investors do you work with?
• When Was the Last Time you closed and funded one of these types of Loans
• Are They Licensed?
• How long have they been doing this type of Finance
• Make sure you are upfront and disclose everything to your Mortgage Professional.. Trust me they will find out anyway.
• Remember gone are the days of favors.. These loans are make sense loans.. not favors

Things To Watch Out For

• During your first converstion if the person tells you total fee's and final rate.  This means the person only work with 1 Hard Money person and can only offer you 1 product. Any true professional works with several companies and Private Investors.  I know I have some companies that start off with as little as 2 points and rates that start at 11%.  However, until I have a complete understanding and full application on the client the rate and programs are the last thing.  These loans are all on a case by case situation.  Their is NO FLAT Rate or Program.
• If the person sounds like a Used Car Salesman on the phone... Guess what.. They probably are.  Gone are the days of people slamming people into loans that are bad.  If you get this feeling from the person you are speaking with RUN! With the Mortgage Industry the way it is now, more and more true Mortgage Professionals have entered into this form of lending.

Standard in The Industry

• Application Fee.  Yes believe it or not many Investors want what they call "Glue".  Before they start doing all the paper work, title work, appraisal they want to make sure the client is very serious about the loan and will close. (I still have some Investors that do not require a application fee)
• Points.  Yes Points have an "S" on the end.  Please keep in mind these are all high risk loans it just depends on how much risk.  The Higher the Risk the Higher the rate and points.
• Pre-Payment Penality.  Now please speak to your Licensed Mortgage Professional and check with your state laws first. However, most of these type loans come with a Pre-Payment Penality. These companies want to ensure the most profit they can. ( I still have some Investors that Do Not Have a Pre-Pay)
• Documentation.  No this is not a typo!  Know matter what you read and what people tell you the truth is a these Lenders/Investors DO NOT WANT YOUR PROPERTY PERIOD..... These are high risk loans and also high returns for the Investors. They make money when you pay.  Now keep in mind if you can't provide documenation that is ok as well but as I stated before RISK = RATE.. The more information you can provide the better.
• Exit Strategy. This is mostly for the investors.  Be prepared to have an exit stragety on this loan/property. If you don't know what this means please consult your Mortgage Professional and also re-think being an Investor.

In closing, please remember if a deal sounds to go to be true in this type of lending, it probably is. Take my advice and RUN as fast as you can away.  Before signing anthing make sure you fully understand what you are signing and commiting for. 

For More Mortgage Advice: Mortgage Advice in South Florida