How to get pre-approved for a Private Money Loan...

Question

So if you are buying a home for your family and have a real estate agent showing you homes they almost always demand to see a pre-approval letter.  Ironically most hard money lenders and many private money lenders don't offer pre-approval letters? Why not?

Timothy Hero · Answer

PML's typically only lend on investment properties. It sounds like you're trying to use them for a personal/primary residence. Anyways, for preapprovals, most lenders want you to fill out an application and do a hard pull credit check. There's good reason for this. Imagine if they just gave out pre approval letters, then the seller took their earnest money and it turns out they aren't qualified for the loan. There would be a lot of people losing earnest money.

Jeff Cichocki · Answer

@Scott Brown, Unfortunately, you're talking to the wrong people. Pre-approvals & proof of funds letters are given out all the time. The reason they are given out so much is that they are basically worthless. A pre-approval letter says nothing more than... "We like what you told us. If it actually turns out to be true when we finally get around to actually underwriting the loan, we may actually give it to. But, we don't have to."

If you want one, go to my website and grab one. Mine is based on one I modified that I got from a bank. I'm a legit lender and I will stand behind every single POF letter that is sent out. Based on what I said before, I can easily give them out  and stand behind them, because I never have to commit to them. No lender or bank does. If you want one from someone other than me (don't worry, I won't be offended - Lol), just google it. Lots of websites to pull them from. Everyone who gives them out will confirm their legitimate.

Good luck!

Odie Ayaga · Answer

Who have you dealt with that wouldn't give you a pre-approval letter? As someone who has used hard money and worked as a hard money loan officer I've never had an issue getting or giving pre-approval letters.