subject: Mistakes to Avoid When Borrowing a Residential Real Estate Loan [print this page] Mistakes to Avoid When Borrowing a Residential Real Estate Loan
One of the essentials of investing in residential real estate is securing the funds that will enable you to make a home purchase. As we all know, using your own finances or offering your own house as collateral for a loan can be quite risky. If the real estate investment tanked up, you might lose your hard earned savings, or worse, your home.
To help protect your personal assets, you should secure a residential real estate loan before buying an investment property. Two of the best examples of such a type of financing are private money and hard money loans. Hard money and private money are mostly asset-based, which is why you don't have to worry about your credit rating or your current financial status when qualifying for a loan. As long as you're borrowing money for a property with a high after repair value, or ARV, lenders will provide you with the funds you need to make a home purchase.
Although non-traditional lenders are more "flexible" as compared to banks, mortgage companies, credit unions, and other conventional financiers, it doesn't necessarily mean that you can go easy on your duties as a borrower and expect them to approve your loan. These private money and hard money lenders are investors, too, and they want to get the assurance that they will earn money by funding your real estate investments.
To ensure that you'll get the residential real estate loan that you need, here are two of the common mistakes that you should avoid when borrowing money for your investment properties:
Misrepresenting the value of the property you wish to borrow money for. This is something that you should avoid at all cost because it can bring forth grave consequences. For starters, you will commit a form of mortgage fraud and you will likely find yourself behind bars if you get caught. In addition, you're encouraging lenders to mistrust you, which will make it difficult for you to secure loans in the future.
Alienating your financiers. When you submit a loan application to lenders, see to it that you're always ready to answer their inquiries. Don't ignore their calls, letters, and e-mails. You should also avoid making promises that you couldn't keep, especially when they concern your payments.
Do you want to know where you can find a good source of residential real estate loan? Simply go to www.RehabHardMoney.com.
