Last Minute Hard Money Loan Denial

What Happens If You Get A Last Minute Hard Money Loan Denial?

We’ve all had it happen; a deal is made, you have it under contract and you’ve gotten a commitment from a private lender to get a deal done. It’s time to get to closing and all of a sudden your private lender gets cold feet. This situation can happen on a moment’s notice and for a number of reasons. From the funding not being available for some reason, to them just not feeling good about doing the loan; they just don’t feel like doing it anymore. Frustrating to say the least.

Risks Associated With Last Minute Hard Money Loan Denial

There have been times too where the Private Lender wasn’t exactly honest with you and strung you along until it was too late. This of course means that you lose your earnest money and worse, your projected profit. Nothing could be worse than knowing you got burned in either of these circumstances. However, there are ways to safeguard your “deal” from falling out due to a lender mishap.

How To Avoid Last Minute Hard Money Loan Denial

Let’s go through how you can do the most to ensure your deal is funded on time.

  1. Know thy lender – this may sound strange, but it makes sense to know who you’re dealing with. Whether they are a broker or a direct private lender or even an institutional lender, you will want to know who it is that either pulls the trigger or can help you figure out whether or not a loan is going through. Sometimes when you don’t know them well, they may not communicate so well because they are working with the ones they do know well and have good track record with. In that case you’ll have to be a squeaky wheel until you can prove your worth. Make sure you know what they’ve lent on and what their criteria are from the outset. Don’t try to be the interviewer, get to know them, they will tell you what they’re looking for. You find a deal like what they said they’re looking for, you know exactly who to take it to and what to expect when it becomes time to get the deal done.
  2. Format and organize your opportunities – Although there are a ton of templates out there, that doesn’t mean your lender will understand it. You may need to send them a couple of samples and or a prospectus for new lenders. This allows them to get to know you and show them how organized you and your team are. This should bring them a better level of confidence in lending to you. If they have questions or have their own format to fill out, don’t buck em; just do it. Remember you’re trying to get them to end to you, not the other way around.
  3. Communicate often – Sometimes to the point that it almost seems annoying. Don’t stop after the loan is closed and funded either, check in with them after the fact when the next payment is due. Even though you can check on third party sites, it’s good to check in with them so you’re at the top of their minds as well. They may have more funds that come back to make new loans with. Sometimes it’s a simple phone call, sometimes it’s a hand written note. Whatever makes them feel appreciated, do it.
  4. Day of closing – Make sure you follow up with your lender to let them know everything went well, or that there were some challenges and what is being done to resolve it. It gives them a sense that they are still in control and thought of well by their broker or borrower.

Last but not least, even if they do try to back out, you can go through the opportunity again. Sometimes, something didn’t click and they need to hear it one more time, or perhaps stated in a different way. Communicate and don’t get frustrated if they still back out. It happens.

NOTE: It’s always good to have a second lender on standby in case your primary can’t do the loan for whatever reason. Cover your bases, and you will find a way to get it done.

Michael Kaleikini: Hard Money Capital Group

If you are a hard money loan borrower and need a hard money loan or private money loan, contact Michael Kaleikini.  Michael Kaleikini is the President and Chief Operating Officer of Hard Money Capital Group and represents solid hard money investors and private money investors whom he had dealt for many years and does not change their minds once they conditionally approval a hard money loan.  Michael Kaleikini can be reached at


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