Questions For Hard Money Lenders

January 19, 2021
Why Don’t Most Lenders Offer Owner Occupied Hard Money?
January 19, 2021

Questions For Hard Money Lenders

(When you are comparing hard money lenders, you will want to ask all of the following important questions. This will help you to make the best selection to meet your needs.)

Hard money is a loan that is provided by a private lender which means that there are no real standards or rates that the lender needs to follow. That is not to say that Texas Hard Money Lenders are not regulated or forced to follow some guidelines, but most do not pertain to the rates and fee structures that they use. So all borrowers should have a list of questions for each potential hard money lender that they speak to. And the list should include all of the following questions.

The cost of the loan is a very big concern as that will have a hand in determining your profit, or loss, at the end of the project. Be certain to as what the interest rate and point for the loan will be. The rates can vary from 10 to 15% for interest and up to about 4% to cover points. Also, ask about any upfront fees to know the total cost of the loan. And the final fee that you should not is the early payment penalty that you would incur if you pay the loan off early.

The next major concern is about the other term of the loan. This can include things like the payment schedule, and the length of the loan itself. You should also ask if you have the option to extend the term of the loan or refinance it if you have not completed your project when the loan comes due.

Down Payments

The next question can vary a great deal because you are working with a private lender and each one has his or her own preference. But you need to know how large a down payment the lender requires. This is a way for the lender to add to his or her security because you have some of your own money tied up in the deal. The more risky the deal looks on paper, the higher the down payment is likely to be. Texas Hard Money Lenders like to know that the borrower has some skin in the game to remain focused and motivated to complete the project and repay the loan.

The Details

Your last questions for Texas Hard Money Lenders will revolve around the final details of the deal. You will want to know how long it would take each lender to be ready to close the deal and also how long until you will have the funding for the loan. In some cases, it is worth paying a little bit more in fees and interest to work with a lender who can close more quickly and have the money in your hands faster. The purpose of asking all of the same questions of all lenders is to have a fair way to compare each offer and to be able to determine which lender will best meet your needs on loan terms as well as the total cost of the loan.

Dennis Dahlber Broker Ri CEO Level 4 Funding LLC
Dennis Dahlberg


Level 4 Funding LLC 
Hard Money Lender

Hard Money Loans

Hard Money Loan

Arizona Tel:  (623) 582-4444

Texas Tel:      (512) 516-1177

Dennis Dahlberg Broker/RI/CEO

NMLS 1057378 | AZMB 0923961 | MLO 1057378

22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave | Austin | Texas | 78701  

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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