Before you decide to take out a hard money loan in Houston TX, there are several questions you should ask yourself and the lender. This guide will help you understand what conditions you need to meet to qualify for a loan and what to look out for.
How much of a down payment do I need to make?
The amount of the down payment is determined by the lender. Generally, a borrower will need to provide between 20% and 35% of the total purchase price as a down payment when taking out a hard money loan in Houston TX. It’s important to note that all lenders are different, and your down payment amount could depend on your specific circumstances. Make sure you ask questions about the down payment amount before agreeing to any loan terms.
Are there any prepayment penalties or fees?
Before taking out any loan, you should ask if there are any prepayment penalties or fees associated with the loan. Some loans may have early payment restrictions that may make it difficult to pay off the loan early, or the lender might impose steep penalties for early repayment. Make sure you understand how the loan terms work before signing on the dotted line.
What are the eligibility requirements for borrowers?
It’s important to understand what the eligibility requirements are for taking out a hard money loan in Houston TX. Generally, these types of loans are associated with high-risk borrowers, so lenders typically require that borrowers have a minimum credit score and income level. Additionally, lenders will often look at the borrower’s total debt-to-income ratio and may need proof of assets or collateral.
How long does it take to get approved and funded?
Knowing how long it will take to get approved and funded for a hard money loan is essential for borrowers. Generally, the application process should take no longer than a couple of weeks. Of course, if more paperwork or documents are needed, it might take a bit longer. In most cases, though, borrowers can expect to have their loans approved and funded within two to three weeks.
For any more questions on pre-approval, contact us today! We look forward to hearing from you!