“How do I get started with a hard money lender?” is probably one of the most commonly sought after question. What is the process? How does hard money lending work? How do I get pre-approved? We are here to answer all of these questions and more and to serve as your capital partner on your next real estate investment.
The low amount of documentation needed to get started with a hard money lender is one of the great benefits of hard money. At Alpha Funding, there is no need for bank statements or tax documentation to get the process started. All we need is the full application filled out from top to bottom.
The loan application for fix and flips, buy and holds, and new construction is all the same. The application includes a personal financial statement, the deal summary, and a background/credit waiver form. These three pieces provide our underwriting team with all they need to prepare for your initial borrower interview call.
Each piece of the application filled out in entirety is crucial in streamlining your Alpha Funding experience. The more information that you can provide up front, the easier it is for our team to get to know you so we can quickly and efficiently fund your real estate investment project.
The personal financial statement gives us an idea of what your liquidity is like now, what it will be like after we close on your hard money loan, and the cash flow available to complete the deal. The underwriting team is looking to make sure that you have the necessary funds in place to cover down payments, closing costs, monthly interest payments, holding costs, as well as contingency funds should the unexpected arise.
The more in depth the personal financial statement is filled out, the better idea our underwriters have on the overall loan scenario. Common mistakes that can hold up the process include leaving the liabilities and net worth section of the application blank or being vague about their income. These gaps in information can slow down the hard money loan approval process.
The credit and background piece of the application also aids in helping our team see the whole picture. As mentioned in our C: Credit Report blog, we are looking at the overall credit health of each borrower. The credit score is moderately relevant however, our team seeks to understand the borrower as an individual and therefore, looks at the credit report more than just the score itself. Once we pull credit once, we do not have to do it again for 12 months.
As far as background is concerned, certain adverse background history is considered during our hard money loan approval process. Speaking with an underwriter about any adverse history or providing a letter of explanation can help negate certain things that arise on background checks. These situations are determined on a case-by-case basis.
With the two aforementioned pieces of the application, you can get pre-approved for a hard money loan with Alpha Funding. If there is not a specific deal that you are currently looking at and you would like to get set up for pre-approval, you can stop at the personal financial statement and the credit waiver. Once you submit the application, we will set you up with an underwriting call with one of our team members who can take you through the hard money loan pre-approval process.
However, if you do have a specific deal that you would like to be considered for funding, the third part of the application is the deal summary. As with the personal financial statement, the more information that you can provide about the deal, the smoother the process will be for all parties. With all of this information submitted in full detail, we can move quickly through the approval process and typically can close on the hard money loan in about ten business days.
The most important piece of all of this is the signature boxes! Double check before submitting your application that all signature boxes have been completed. We want to serve you as quickly as possible at Alpha. We understand that properties move quickly and your deal is important to us. Missing pieces on the application slow the process for everyone involved.
We can’t wait to work with you! Get started by submitting your Quick Pre Approval at www.alphafunding.com or give us a call at 732-657-2014.