Here’s what can happen if you choose the wrong broker for a hard money loan:

1. The broker you pick doesn’t know where to find hard money investors. He tries to put your mortgage through with traditional lenders and gets turned down. He tells you a hard money loan is impossible.

2. Rather than doing any research into the issue, the broker responds to your queries with “Oh, no, we can’t do that. It’s illegal.” You’d be surprised how many will claim that something is illegal when they actually mean “I don’t know anything about that.”

3. Despite never having completed a hard money transaction, your broker is overconfident. He makes outrageous claims without double-checking the facts. He reassures you that you can take out a hard money mortgage without a down payment or that your interest rates will be the same as those given for traditional loans (both false).

As you can see, choosing a hard money mortgage broker is an extremely important decision and can have a big impact on whether or not your loan goes through at all. Unlike traditional transactions, a lot of brokers don’t have any experience with hard money loans and won’t even know where to begin.

I’d suggest gathering references and calling your top picks to get some information about their business and direct experience with hard money loans. Take a look at my complete article How to Choose a Hard Money Mortgage Broker for some of the most important qualities to consider.

photo credit: TheTruthAbout…

See Also:

Answers to Common Hard Money Mortgage Questions

How to Take Out a Hard Money Loan

One way to score sales is to offer help to people who cannot necessarily qualify for traditional loans and need seller financing. For agents who are willing to wade through often confusing deals, the rewards can be worth it.

Real estate writer Broderick Perkins from Examiner.com reports:

“Tight mortgage money makes seller-financing, not a silver bullet to shoot down stiff underwriting standards, but an option to consider in a tight mortgage market…

Only a fraction of sellers are willing to take on the role of financier, but that fraction is likely larger than it was a few years ago when lenders had plenty money to lend.

That’s because today’s home buyers are having a tough time finding mortgage money and sellers are having a tough time finding buyers.”

Seller financing has quite a few drawbacks. But, when deals go smoothly, it can be a smart decision for all parties involved: the buyer, the seller, and the agent.

See Also:

Seller Financing Guide

Seller Financing Risks

Common Seller Financing Questions

For those who can afford it, now is a great time to buy a house. Foreclosures are making areas that were formerly unattainable rather affordable. Unfortunately, it’s also extremely difficult to take out a loan right now. Traditional lenders are worried about their bottom line and only want to extend money to the most credit-worthy. If you have not-so-great credit, difficult-to-prove income, a sketchy employment history, or less than 20% down, you may not be able to take out a traditional loan. However, there are other options available.

We’ve gathered together some of the best information on creative financing strategies such as seller financing, hard money loans, and peer-to-peer lending. We’ve also created guides to more common (but still easier) ways to buy a house such as FHA loans or non-traditional bank loans.

We’ve banished the advertising to the sidebars…so, don’t worry about pesky referrals finding their way into the content. All the guides and articles are just for you. Hopefully, some readers will find a way to purchase their dream homes. Hopefully, some will decide that creative financing just isn’t right for them and will work on qualifying traditionally.

If your questions aren’t answered here, you can find more help in the forums. We hope it becomes a community of borrowers, lenders, and mortgage professionals – working together to give each other a hand.

We hope you’ll come back and read our blog regularly. We welcome feedback, so please feel free to leave a comment or drop us a line at admin@creativefinancing101.com.

Wells Fargo Alternative Documentation Qualifications

Borrowers must meet traditional lending standards with the exception of proving their income. To prove income, they must submit six or twelve consecutive months of their most recent bank statements. Income is determined by the monthly average of the money deposited.

Wells Fargo Alternative Documentation Loan Terms

The alternative documentation solution may be applied to any personal home loan including both fixed-interest and adjustable loans. Borrowers should expect to pay a higher interest rate than may be offered for traditional qualifications.

Applying for a Wells Fargo Alternative Documentation Loan

You can apply for a Wells Fargo Alternative Documentation Loan by contacting a mortgage broker or calling Wells Fargo directly (1-877-937-9357). You can also visit their website for more details about this program.