Most Tennessee home buyers seek a conventional loan based on their credit rating, income and down payment, but there are situations where they may turn to a hard money lender. The terms of hard money loans are generally far shorter than those of traditional mortgages, and this kind of financing could be useful for home buyers as well as for people who plan on selling their homes quickly.
Unlike conforming FHA and VA loan underwriters, hard money lenders do not take income, employment history or credit ratings into account when assessing a loan application. Hard money loans are based on the value of the property involved, and this can be a challenge as hard money lenders generally offer loans across the country and may not be familiar with local market trends.
In addition to a thorough and complete appraisal, hard money lenders tend to look at tax assessments and the broker's price opinion when considering a loan application. Tax assessments provide additional data, but they are not always updated annually and they do not take the condition of the property's interior into consideration.The price opinions of brokers may be useful in many cases, but they are treated with skepticism because brokers who work on commission have a tendency to enhance the value of properties.
Choosing the appropriate financing package is often as difficult for home buyers as finding the perfect house, and mistakes made here can be frustrating and costly to remedy. Attorneys with residential real estate experience may assist home buyers by reviewing mortgage packages for the kind of provisions that loan officers may not be eager to disclose. Attorneys could also check the backgrounds of loan companies for signs of unethical business practices and violations of truth in lending laws.