Questions You Should Ask A Lender When Applying For A Hard Money Loan.
                     Questions You Should Ask 
A Lender When Applying 
For A Hard Money Loan.
www.acalending.com
Are you a new hard money 
borrower who wishes to obtain 
a hard money loan in 
California? It may be terrifying 
while inquiring about a hard 
money loan for real estate! 
Having a discussion with the 
professionals you choose to 
work with when looking for 
your 
California hard money loan 
can help ease this tension. The 
hard money lender should be 
able to educate you about 
hard money loans. Please do 
some research. You can do it 
by asking a few questions to 
the hard money lenders in 
California. It will help you 
avoid adverse situations or 
stay away from hard money 
lenders who are unable to 
deliver what you need. Here 
are some questions to 
consider when looking for a 
Californirnia hard money loan:
1. How much expertise do you have in lending hard money?
It is crucial to confirm that the lender has relevant hard money lending experience and 
experience with the specific kind of hard money loan the borrower is looking for. The better 
the hard money lender, the more experience they have. Leveraging the lender’s expertise will 
help the borrower successfully obtain the funding required. 
2. What is your real estate license?
Verify the hard money lender’s license status. Their license should be visible on their website 
and in any promotional materials they create. Request their license if necessary. Then, you 
can use the license to perform a search on the state website. It will reveal additional 
information about the licensee! 
3. Are you a broker or a direct hard money lender?
A direct hard money lender will handle the whole loan transaction and provide internal 
funding for the loan. A hard money lender broker will approach other funding sources with the 
request. Working with a hard money broker is advantageous as you have access to many 
different loan programs and funding sources rather than just one.
4. Have you contacted prior borrowers’ references?
A reputable and knowledgeable California hard money loan provider 
should have no trouble directing a prospective borrower to good 
evaluations and endorsements from pleased customers. The lender may 
include reviews or recommendations on their own website or on 
websites belonging to third parties. However, there can be a problem if 
the lender has yet to have satisfied customers in the past. 
5. How many points do you charge, and what is your interest rate?
The two elements that most commonly determine the cost of the hard 
money loan are the interest rate and the points. Speak with some 
leading California companies that offer hard money loans. You can get a 
fair idea of the range of rates available for their loan request from it. 
However, you should consider the experience and trustworthiness of a 
lender that offers a hard money loan in California.
6. Is there a fee for early payment?
A minor prepayment penalty, which requires a minimum interest to be paid 
on a loan, is a typical practice among lenders. Prepayment penalties 
frequently have no impact on the borrower at all. The borrower must ensure 
any prepayment penalties fit into their anticipated schedule. The borrower 
may occasionally eliminate a prepayment penalty by negotiating a higher 
interest rate or paying more points. The owner-occupied loans are not 
permitted to have prepayment penalties. 
7. How soon will the loan be funded?
The hard money lenders approve the fund in an week or two. Reputable direct 
hard money lender may be able to fund hard money loans in as little as 3 to 5 
days as well. They do it to keep a deal alive! However, sanctioning the loans 
take at least one week or two due to certain state rules and disclosure 
requirements.
8. What loan terms are available?
In California, hard money loans are often only used temporarily. It is typically 
offered for a term of 12 months to 5 years. In contrast, some lenders might 
only provide terms of 1 to 2 years. They work with the borrower to ensure the 
timeline with the lender’s loan terms.
Ask these questions upfront. It will assist you in avoiding wasting time on a 
hard money lender who won’t grant your request for funding. In some 
circumstances, a fix-and-flip investor will need a loan to buy the property and 
have money set aside for renovation costs. In contrast, some lenders can 
offer to finance all or a portion of the renovation expenditures. Some hard 
money lenders will provide a loan to buy the property and demand the 
borrower have additional funds to cover the rehab. Find the hard money 
lender & discuss whether they offer financing to cover the renovation cost.