Vetting a Lender. How do you do it?

[Kevin S.]

Hello everyone.  What's the vetting process when choosing your lender?  Any investor here found your lender on BP?  Any negative experience working with one on BP?  

What should I be looking out for? Do you verify if the(lender or company) license is active or any complaints on the books?  If so how? 

Do you work with a 'someone' and follow him/her when they switch company? Do you stay with the original company?  

How long should the company have been in the business? Any red flags to look for?  

Any advantage for lender to be local?

Are there any one or two 'must ask' questions or 'must know' facts when choosing one?  

Appreciate if you can share anything/everything.  Thank you.

[Chris Seveney]

Quote from @Kevin S.:

Hello everyone.  What's the vetting process when choosing your lender?  Any investor here found your lender on BP?  Any negative experience working with one on BP?  

What should I be looking out for? Do you verify if the(lender or company) license is active or any complaints on the books?  If so how? 

Do you work with a 'someone' and follow him/her when they switch company? Do you stay with the original company?  

How long should the company have been in the business? Any red flags to look for?  

Any advantage for lender to be local?

Are there any one or two 'must ask' questions or 'must know' facts when choosing one?  

Appreciate if you can share anything/everything.  Thank you.

 First question is are you going to a private lender who may not be licensed or you looking for a traditional lender? There are a significant number of lenders in the space. When a question is asked "what should I be looking for?", the question you need to ask yourself is "what do I need?

I ask that as: are you looking for long term or short term funding. Are you looking for lowest payment possible and maybe an interest only or variable rate (but that has higher risk).

Once you define what it is you need, then you should start speaking with lenders and ask them what types of products they have for what it is you need.

If it is a traditional lender and they are licensed through the nmls (google nmls consumer access to find them), then that means they have been vetted.

Note that most lenders DO NOT keep their loans and they get sold, so age of company is usually not important, experience of originator would be more priority for me