What To Do After a Last-Minute Hard Money Loan Denial
This guide will cover what to do after a last-minute hard money loan denial. We’ve all had it happen; a deal is made, you have it under contract, and you’ve gotten a commitment from a private lender to get a deal done.
It’s time to get to closing, and all of a sudden, your private lender gets cold feet. This situation can happen at a moment’s notice and for some reason. From the funding not being available for some reason to them not feeling good about doing the loan, they don’t feel like doing it anymore. Frustrating, to say the least.
There is no reason for a last-minute hard money loan denial. Professional hard money lenders do not give a last-minute hard money loan denial. In the following paragraphs, we will cover what to do if you get a last-minute hard money loan denial from a hard or private money lender.
Risks Associated With Last-Minute Hard Money Loan Denial
Investors seeking hard money loans have no time to screw around with novice so-called hard money lenders. Professional hard money lenders need to get loans close. Not just closed, but on time. If a commercial investor default on their commercial loan, they have their properties at stake. Courts do not mess around. If you do not pay your note on your commercial loans, the property will get appointed a receiver, and you will lose the property.
Lending Network is a hard money lenders. We have a national reputation for NOT just closing loans, but closing hard money and commercial loans on time. In many instances, Lending Network has closed hard money loans in a few days.
There have been times when the Private Lender wasn’t exactly honest with you and strung you along until it was too late. This means you lose your earnest money and your projected profit. Nothing could be worse than knowing you got burned in either of these circumstances. However, there are ways to safeguard your “deal” from falling out due to a lender mishap.
How To Avoid Last-Minute Hard Money Loan Denial
This section will discuss how to avoid last-minute hard money loan denial. Let’s review how you can do the most to ensure your deal is timely funded. Know thy lender – this may sound strange, but it makes sense to know who you’re dealing with. Whether they are a broker, a direct private lender, or even an institutional lender, you will want to know who it is that either pulls the trigger or can help you figure out whether or not a loan is going through.
Sometimes when you don’t know them well, they may not communicate so well because they are working with the ones they do know well and have a good track record with. In that case, you’ll have to be a squeaky wheel until you can prove your worth. Make sure you know what they’ve lent on and what their criteria are from the outset.
Don’t try to be the interviewer. Get to know them, and they will tell you what they’re looking for. You find a deal like what they said they’re looking for. You know exactly who to take it to and what to expect when finishing the deal.
There Is No Reason To Get a Hard Money Loan Denial
There is no reason why you should get a last-minute hard money loan denial. Format and organize your opportunities – Although there are a ton of templates out there, that doesn’t mean your lender will understand them. You may need to send them some samples or a prospectus for new lenders. This allows them to get to know you and show them how organized you and your team are. This should bring them a better level of confidence in lending to you. If they have questions or have their format to fill out, don’t buck them; do it. Remember, you’re trying to get them to end for you, not vice versa.
Importance of Open Communication
Communicate often – Sometimes to the point that it almost seems annoying. Don’t stop after the loan is closed and funded, either. Check-in with them after the fact when the next payment is due. Even though you can check on third-party sites, it’s good to check in with them so you’re at the top of their minds.
They may have more funds that come back to make new loans. Sometimes it’s a simple phone call. Sometimes it’s a handwritten note. Whatever makes them feel appreciated, do it. Make sure you follow up with your lender to let them know everything went well or that there were some challenges and what is being done to resolve them. It gives them a sense that they are still in control and thought of well by their broker or borrower.
Last, even if they try to back out, you can go through the opportunity again. Sometimes, something doesn’t click, and they need to hear it one more time or perhaps be stated differently. Communicate, and don’t get frustrated if they still back out. It happens. NOTE: It’s always good to have a second lender on standby in case your primary can’t do the loan for whatever reason. Cover your bases, and you will find a way to finish it.
