Halloween is approaching, but that doesn’t mean your next real estate loan has to be an absolute horror story. Finding a trustworthy lender you can work with can be tricky, especially if there are so many out there who thrive on deceitful practices. On your next search for a lender, be on the lookout for these top scams to steer clear of horrifying lenders.
Avoid The Phantom Lender
This type of lender usually offers the borrower a loan that seems too attractive to pass up, so the borrower jumps at the opportunity. The lender then collects heavy upfront fees, and the basically turns into a ghost, disappearing from the borrower who had high hopes of receiving their promising loan.
Beware Dead Promises
If the loan sounds too good to be true, it probably is. The lender may present a great deal with minor fees, quick turnaround, and extremely
Flee Frightful Fees
If a hard money lender is charging upfront fees over $1,000, this is most likely a scam. It’s normal for lenders to charge fees, but some hard money lenders overcharge borrowers, and then never provide funding. A reputable lender will not charge excessive
Read the Wicked Fine Print
Scammy hard money lenders may have illegal fine print. Before you sign into any loan, carefully review the fine print and terms. A trustworthy lender will provide you with a term sheet on request, and all of their terms will be lawful.
Searching for a reputable lender every time you have a real estate investment opportunity can be scary, but if you know which lenders to avoid, you’ll be giving yourself the opportunity to have successful deals.