A branded banner with FAQs on it.

House Flipping and Hard Loans FAQ

Note: originally posted on LendingHome.com and LendingHome is now Kiavi.

Kiavi’s goal is to ensure that getting financing is the easy part of your real estate investment projects. Please read answers below to some of our most frequently asked questions from our novice bridge loan borrowers to help you move forward in the process. (For our Rental FAQ blog post, please click here.)

House flipping and hard loans FAQ

Questions:

Q: What is a pre-qualification letter and why is it important?
A: A pre-qualification letter is a document stating that a lender has done an initial vetting of your deal and qualifications. It is not a guaranteed loan approval. A pre-qualification letter can make your offer look stronger to the seller.

Q: How do I get a pre-qualification letter through Kiavi?A: You can get a pre-qualification letter by completing the initial loan application and downloading the letter from our "loan summary" page.

Q: How do I update my pre-qualification letter?
A: As your property details change, you’re able to create new letters on your own. You can do this by signing into your dashboard. Next, create a new loan with the updated terms and lastly, download your new pre-qualification letter.

Q: What type of properties are eligible for financing?
A: We provide financing for SFRs, Condos/Townhomes, PUDs, and 2-4 units.

Q: What type of documentation is required for fix-and-flip loans?
A: You will need a signed purchase contract, Scope of Work, a formation document and an organizational agreement (if borrowing as an entity), contact information for your closing agent, and contact information for your hazard insurance agent.

Q: What types of entities will you lend to?
A: Individuals, sole proprietorships, LLCs, corporations, general partnerships, limited partnerships, and statutory law and common law trusts (including land trusts).

Q: Is there a prepayment penalty?
A: No, our bridge loans do not have a prepayment penalty.

Q: What are the minimum and maximum loan amounts?
A: Our minimum and maximum amounts vary, please contact our sales team for specifics.

Q: Do you have a minimum credit score
A: Yes, please contact our sales team for more information.

Q: How do construction draws work?
A: Draws are the reimbursement of work completed.

Q: Do you lend to foreign investors?
A: No, at this time our programs are not available to foreign nationals.

Q: How long does it take to close?
A: In some cases we may be able to close in as few as 5 days, typically we close in 10-15.

Q: Is there a maximum amount of loans I take out at once?
A: Yes, depending on your experience tier, there is a maximum number of active loans you can have with us. Contact our sales team to find out more.

Q: How do I get a loan payoff?
A: Loan payoff requests are seamlessly requested from your online dashboard. Find the loan, click the "payments" tab, and request one. You can even put in the title company’s contact information so it goes straight to them.

Q: Will my loan be serviced by a third party?
A: No, we service our bridge loans in-house.

Q: Does the loan go on my personal credit report?
A: If borrowing as an entity, the mortgage loans will not show up on your personal credit report.

Q: When is my credit pulled?
A: A soft credit pull is completed when a loan application or a membership application is submitted.

Q: Is the credit pull a soft inquiry?
A: We do not perform a hard pull of your credit.

Q: Can I upload my credit report?
A: No, we do not accept credit reports from customers.

Q: Does Kiavi offer cash-out refinance and is there a seasoning period?
A: Yes, contact our sales team to learn about our seasoning period.

Q: What’s the minimum loan amount for cash out refinance?
A: Our minimum and maximum amounts vary, please contact our sales team for specifics.

Q: Do you require an appraisal? What’s the appraisal fee for a bridge loan?A: Depending on the loan type, an appraisal may or may not be needed. Our sales team can help answer questions unique to your deal.

There is typically no appraisal cost required as we do the valuation of the property, internally. The service fee at loan closing covers the cost of our internal valuation and processing of the loan. If a traditional appraisal is required, it is ordered through a third party appraisal company and will fall in line with appraisal costs in the property’s area.

Q: If the appraisal report comes lower than expected, do I have an option to lower the loan amount without being declined?
A: Yes, you may have the option to lower the loan amount in order to proceed with the loan. You will work closely with your Account Manager through the loan origination process who will help you navigate any issues that may arise along the way.

Q: Do I have to borrow as an entity?
A: It depends on the state you are in. The states where we require our customers to borrow as an entity are: DC, FL, MN, NJ, OH, OK, TX, VA.

For further questions, please reach out to us!

***

Start your next success story today. Our simple and fast process makes it easy.

Related Articles

Disclaimer

The above is provided as a convenience and for informational purposes only; it does not constitute an endorsement or an approval by Kiavi of any of the products, services or opinions of the corporation or organization or individual. The information provided does not, and is not intended to, constitute legal, tax, or investment advice. Kiavi bears no responsibility for the accuracy, legality, or content of any external content sources.