getting a pre-qualification letter from HML

I am a investor from Idaho.
I decided to get a HML for my rehab/sell project after I have tried and tried to get a only pre-qualification letter from normal mortgage lenders and they have been ignoring me. I feel like even if I have a more than a fair credit (697), HML must be my last option. I guess the State of Idaho is not a good state for Investors like me. I am just having a hard time to get a simple short-term loan for rehabbing investor here.
here is my question for everyone who are reading this.
I can’t even offer to sellers at this point because I can’t even find a single lender who gives me any pre-qualification letter. So, I am stuck here and I don’t know what to do. Is it possible to get a pre-qualification letter from HML? One of them told me that they don’t do that until there is actual property to purchase and rehab. well, most of my sellers don’t even talk to me if I don’t have a some sort of pre-qualification letter! anyone please give a advice on that frustrating process of borrowing money.

Hello, There is a way to get a pre qual. letter from an HML without even making an offer. But it has to be done correctly. You need someone with experience. Also, any state can get funding. Again, you need someone with experience.

I had this same question on the bird dog forum worded to the effect that I can’t see some properties because I don’t have pre-approval. Well, I’m getting it now through a traditional lender, but I’d also like to have an HML approval also. How does one go about getting this? I want to birddog for experience so since I’m not fronting large sums of money, what can I do here? I don’t want my credit pulled every 3 months or so keep pre-approval with a bank!
I’m in Maryland - any HMLs want to work with me? ???

Can you go in to a little more detail? Who is “someone”?

Hello, I recommend (someone) a broker.

Hey how are you? What sort of stuff would you guys as brokers want from us as investors? Does the investor have “rules” they must obide by? I mean, how can you pre-approve someone when they could go out and find themselves a horrible deal?

Just my 2 cents, Do you have a rich family member or freind that would like to investment say 40k for a split of 50/50
buy at 20k put 10k into property sell @ 100k
100000-40- 30=30000 then minus holding cost say 10k and split 20k sounds like a win win deal to me. you do the leg work family/friend supplies the money you both make 10k who wouldn’t want to do it?
you will be able to act fast like other investors in ur city.

Hope it helps

Hello, You have to find the deal first. You submit information to the lender about the project, then they base their decision from there.

What did you mean when you said this? I’m getting confused. I had someone write me from He said this:

" I always recommend that you buy either before or after foreclosure and that you close through a title company. Period. We will not finance any other way. You can get pre-approved at our website, and then go shopping. Remember the industry rule of thumb-pay no more than 65% of retail value, MINUS estimated repair costs. Follow this rule and you will almost always make a profit. "

How does this work?

Hello, Sorry for the confusion. With a traditional lender, you pre-qual yourself then find the project. With a HML, you pre-qual the project then find the funding. HML base their funding on the project not your credit.

did you try the link on this web site for Hard money lenders… this is a good place…and then simply ask for pre qual letter… we send them out all the time for the states we do business in…thanks


There is no reason why a “normal” mortgage broker cannot give you a pre-qualification letter…unless, you are not allowing them to pull credit and/or review income documentation.

Just my $0.02

Pat Lawson

There is a world of difference between a “pre-qualification” letter and a “pre-approval” letter. A pre-qual simply says you seem to be alright from the verbal information that you provided (none of it has been verified). A pre-approval specifically states a loan amount in dollars, an LTV percentage, and is contingent ONLY on the property qualifying; the borrower’s financials and credit are already verified in their system.

There is also a big difference between a letter from a mortgage broker and a disbursement lender. The former cannot provide a loan committment. The latter provides the loan committment (through their own underwriters).

As a licensed broker, I advise my seller clients never to believe a pre-qual letter. I always advise my clients to insist on a pre-approval letter from a disbursement lender. A pre-qual letter from a mortgage broker is virtually worthless.

Note that true hard money lenders care very little about the credit worthiness of the borrower. They care about the equity in the property. If the borrower shows a pattern of financial negligence or fraud, then even a hard money lender may hesitate. So, a simple credit report pull with no glaring issues (e.g., “take the money and run”) will be sufficient for a hard money lender.

xarax is right.

A PreQual letter is nothing more than a “guess” that you would be approved for a certain loan amount based on the parameters (i.e. credit, income, assets, etc.) that you gave to the L.O.

A Pre Approval letter is only offered after the parameters that you have laid out have been verified.

A loan commitment is offered by the Lender after all parameters have been submitted and have been verified.

I do not even waste my time giving out PreQual letters. I always explain to the client that if they are serious enough to make an offer, then they need to get themselves preapproved. This also saves them time as all they need to do, once they find the property, is get an appraisal and the process is pretty much complete.

Hello, Mark,as usual, I like your answers. They are right to the point. What I find is happening is that sellers are wanting something from the investors that will “prove” that they can purchase the property. And this is just so they can see the property. What do you recommend that the investors use as “proof” that they are able to purchase? Something that they can use for every seller? I’m sure the newbies will love your answer.

Well gosh you make me blush. ::slight_smile:

For those investors that have a Broker/Lender that they are dealing with it should not be an issue for them to get a PreApproval Letter. I usually keep it generic, " Mr/Mrs client has been preapproved for a mortgage with us"

I do not put the LA on it as it may take away some of my client’s bargaining power. “I am only approved for $X”
This way they can “haggle” a little.

I have not heard of any situations where the agent would not accept this.

I would suggest that the newbies find someone that will be their “money person”. They should probably do this before they venture out into the “jungle” so that they know what they can and cannot do.

Does that help any? :-\

Hello, Mark, Sorry to put you on the spot. But I’m sure you saw this question coming: Who would be considered a “money person”?

Remember, the newbies are reading this and we want to help them.

I Live in UT and ID and I know all the HML is both states it is not hard to get money here and it is very very easy you must be looking in all the wrong places.

in UT AND ID you can get up to 80%LTV on great terms as far as HML is conserned.

You can get 100%NO money out of pocket up to 80%LTV so I feel that you are working with brokers that do not specialise in investment loans


You must use a broker that has 10 year experience PLUS and Investests in REI 3-6 homes a year min and you must ask qestions that prove they are doing so.

HOW CAN YOU NEWBIES CONTINUE TO GO TO GENERALIST MORTGAGE BROKERS that is like going to a GENERAL FAMILY DOCTOR when you have a brain tumor and you want your family Doc to to the surgery SOUNDS OUT LANDISH and that is what you are doing when you do not go to someone that know your issues and uniqueness about REI.

That is one reason why you continue to have problems.