Hard Money Loans: 5 Ways to Avoid Online Lending Fraud
As a real estate investor, finding a funding source for your projects is instrumental. Working with a hard money lender is among the best avenues you can use to meet your goals. While this can be beneficial to you in the long run, you should also be aware of the pending risks. Online lending fraud makes it hard for investors to get the best results from their effort hence the need to learn ways of avoiding them.
Avoid Lenders Asking for Collector’s Fee
The prospect of funding your real estate project can be overwhelming, but it also makes you vulnerable to several risks. You should note that some lenders will charge upfront fees without funding any loans. You should be aware of lenders who ask for collector’s fees or have upfront or hidden charges without processing or ascertaining your funding.
Avoid Giving Out Personal or Sensitive Information
You can get into trouble when you give out sensitive information to lenders. This is especially when dealing with online lenders. You should never submit forms without verifying the legitimacy of the lender. Social security numbers, banking information, and driving license number are sensitive information that you should never give out.
Use Word of Mouth to Find a Lender
There are several hard money lenders you can work with. You should, however, seek referrals and recommendations to find one. This is vital as you will avoid online lending fraud when directed to a reputable lender.
Always Check for License and Registration
While it can be hard ascertaining the legitimacy of the license or registration the lender possesses, there are effective parameters you can use. Seek to know what makes the right license before looking for a lender in the market. It is easier to avoid online lending fraud when you can ascertain the license and registration status.
Research
Look at their website and other social media profiles, as this will help you determine the company’s legitimacy and the services rendered. Social media profiles help you know their reputation and the relationship with previous clients.
Utilizing the services of a hard money lender is a stepping stone to achieving your objectives. You should, however, be keen enough to avoid lending fraud by following the above ways.