How to Obtain Preferred Pricing from a Hard Money Lender

Creating a strong partnership with a hard money lender can offer brokers the following rewards:

• Faster loan processing times
• Volume discounts and preferred pricing
• Cooperative marketing opportunities
• Priority call returns and support
• Personalized training, education and onsite seminars
• Joint ventures, branch licensing and correspondent lending opportunities

Hard money lenders receive large volumes of loan submissions daily from brokers often looking for a last resort to place a hard to fund loan.  A large majority of these submissions are incomplete, unrealistic or "spam" loan submissions. Making a hard money lender's loan review simple can substantially reduce the workload and increase the likelihood that a broker would be entitled to personalized attention and preferred pricing. 

Here are some easy ways to obtain favorable pricing from a hard money lender:

1. Retain High Closing Ratios:  High closing ratios means less loan fallout and lower costs per closed loan.  High closing ratios gains the respect and the confidence of a hard money lender providing for smoother and more timely fundings on future loan files.
2. Avoid Habitual Loan Shopping:  Refrain from habitual loan shopping.  Loan shopping is charaterized by submitting a single loan to multiple lenders simultaneously.  Lenders do not like to commit resources to processing loan files that have a high likelihood of being funded by a competitor. 
3. Review the Appraisal to Insure Realistic Property Values:  Reviewing the appraisal and checking comps prior to a loan submission to insure property value is accurate reduces loan fallout and increases a lenders confidence and leads to priority processing for a preferred brokers loan files. 
4. Volume Submissions: The more loans that a broker closes with a single hard money lender, the more valuable each loan file submitted is.  Brokers that close more loans often are entitled to substantial discounts and preferred pricing.    
5. Submit Complete Loan Packages: Complete loan packages reduces loan push back and reduces processing time.  A complete package includes: fully completed and accurate 1003, 1008, GFE, TIL, appraisal, preliminary title, payoff demands, purchase contract (if a purchase transaction), borrower authorization and tri-merge credit report. 
6. Use Online Submission Forms: online loan submissions reduces duplicate data entry.  If a lender offers the ability to submit loans online or has an automated underwriting engine, brokers are often incentivized to use these services as they drastically reduce data entry. 
7. Use Preferred Vendors: using the preferred vendors of a hard money lender including title, escrow and appraisal services creates efficiencies and predictability in the loan process thereby reducing costs. 
8. Review and Understand the Lender Guidelines. Brokers often submit loan files without paying attention to the lender guidelines and loan products offered.  This increases loan fallout and cost per closed loan.

And finally, inviting your hard money lender to a playoff basketball game can't hurt.