Applying for a loan can put you in a vulnerable position, and it’s easy to feel like you are powerless. After all, you are the one asking for financial assistance, and if you’ve been treated badly by banks in the past, your confidence may have taken a hit.
The truth is, when you’re seeking a loan, you have more power than you think. Due to the rise of alternative lenders, even those who may have been turned down for a bank loan are still in a strong position to seek financial help.
But the old adage holds true: information is power. To help you get the most out of your lending experience, we’ve rounded up the top five questions you must ask your loan broker. Getting answers will give you confidence and ultimately lead to you securing the loan you need.
1. Ask Your Loan Broker if They Can Help With Your Situation
Since there are many different types of loans and everyone has their own unique situation, you need to make sure you are talking to the right person. If you need a hard money loan or some other kind of alternative financing solution, you won’t want to waste time with someone who only does regular bank loans. It is always a good idea to find a loan broker who specializes in the type of loan you need.
2. After Repair Value vs. Current Value
If you need a loan to work on a real estate project, you probably want to seek a fix and flip loan — also known as a rehab loan. You want to be sure to ask your loan broker if the loan will be based on the current value of the property or its value after you’ve completed repairs and renovations. That could make a significant difference in the loan amount, so it’s important to get an answer up front.
3. Find Out Your Down Payment Requirements
When you’re seeking a loan for a real estate venture, loan brokers want to feel confident in your investment in the project. Different loan brokers may have different requirements for the minimum down payment you’ll need to put on a house, especially since the typical down payment changes as the economy changes.
Make sure the down payment that you can afford and that you had in mind is in line with what your loan broker is looking for.
4. Get an Understanding of the Approval Process
If you’re seeking a loan, chances are you have a deadline for when you need the funds. You don’t want a slow approval process to hold up a project or cause an opportunity to fall through. Asking how long the approval process for your specific loan will be, so you can determine if the wait time meets your needs.
5. Ask about Past Customers
No loan officer will give you specific details about past customers they’ve worked with, but they should be comfortable providing statistics and examples of success. Ask for testimonials or instances of customer satisfaction to get a feel for the company’s reputation. If they’re up front in sharing this information, you’ll know you’re in good hands.
Ready to Secure a Loan?
You don’t need to know everything before you meet with a loan broker, but having a list of specific questions is a great way to get the information you need. Having your business to offer puts you on an equal playing field, and you should feel confident in your relationship with your loan broker.
Ready to start the loan process? Contact us today!