Understanding Your Loan Documents

Navigating loan documents can be complex, especially in private money lending. Here’s a simple guide to help you understand the key components of your loan documents:

1. Loan Agreement

This is the core document outlining the terms of your loan. It includes:

• Loan Amount: The total sum you’re borrowing.
• Interest Rate: The cost of borrowing, expressed as a percentage.
• Repayment Schedule: How and when you need to make payments.

2. Promissory Note

The promissory note is your written promise to repay the loan. It details:

• Principal: The original amount borrowed.
• Term: The duration of the loan.
• Payment Terms: How often and how much you will pay.

3. Deed of Trust / Mortgage

This document secures the loan with the property:

• Collateral: The property used to back the loan.
• Rights and Responsibilities: What happens if you default on the loan, including foreclosure procedures.

4. Disclosure Statements

These provide important information about the loan, including:

• Fees: Any additional costs associated with the loan.
• Legal Rights: Your rights and obligations as a borrower.

5. Loan Closing Statement

This document summarizes the financial details of the loan closing:

• Final Amount: The total amount due at closing.
• Adjustments: Any adjustments for taxes, insurance, or other costs.

Tips for Reviewing Your Documents

• Read Carefully: Ensure you understand all terms before signing.
• Ask Questions: If anything is unclear, don’t hesitate to ask for clarification.
• Consult a Professional: Consider having a lawyer review the documents to ensure your interests are protected.

Understanding these key components will help you feel more confident about your private money loan. If you have any questions or need further assistance, our team is here to help!