Thinking about a mortgage loan from a big-name bank or from a private lender but you aren’t sure which one to choose? Think again—the differences will matter when you find that perfect property and are ready to close the deal. Unlike a traditional mortgage loan, a mortgage loan from a private lender such as Gelt Financial has benefits that can’t be beaten.
It’s Easier To Qualify From A Private Lender
Not all of us are blessed with a high credit score. It can take years to build your credit or come back from a tough time where your credit score was once low. These financial negatives follow you around on your credit reports for years, and if you seek out a traditional mortgage loan from a bank, there’s a high chance that you could be turned away.
With a private lender, credit scores and reports might not matter so much because they aren’t a bank and can secure collateral elsewhere. Private lenders have much more flexibility in choosing their beneficiaries, and for that reason, it’s why they are known to take risks. Regardless of your credit score, a private lender can give you a fair chance at a mortgage loan.
Build a Relationship
Seeking out a private lender for a mortgage loan is a great way to start a lifelong relationship with a hard money lender. Honoring their terms of the contract, following through on your obligations, and proving to them that you are a worthy beneficiary will set yourself up for future success and a professional relationship with your private lender where the investment opportunities are endless.
Less Red Tape
For real estate deals, time matters. There could be a property buying opportunity that demands you to move quickly and without the hiccups that traditional banks are sure to throw your way. Private lenders don’t have to deal with this the same as these large financial institutions, so that competition you’re seeing will be out of the game in no time.
Great for Beginners
A mortgage loan from a private lender is an excellent starting point for beginners to loans. We don’t all start off with property or a whole lot of money to our name, so these loans allow us to begin our lives by making these important purchases and investments. Private lenders allow for risks, and those just beginning on their financial journey may be considered one, but once they’ve established themselves with a mortgage loan with a private lender, they can move onto other investments.
With a Private Lender, It’s An Easier Application Process
Just like with qualifying, Gelt Financial sees the application process differently than a traditional bank. A private lender won’t be interested in obtaining all of the paperwork and going over it with a fine-tooth comb as a big name bank would. Private lenders take risks, it’s part of their job, and if you are self-employed and don’t happen to have a W2 form, lack a steady work history that traditional lenders demand, it won’t matter as much in this application process. With a private lender, you’re given a fighting chance at applying for a mortgage.
Banks have to follow a stringent and arduous filing process for mortgage loans, and obviously, this is time-consuming as well as stressful. Private lenders, however, aren’t slammed by these regulations and don’t have to deal with the red tape. This allows for a faster process in securing you the loan, much faster than if you were to apply for a loan in the traditional sense. And if you have already worked with this private lender before, it can be executed even more efficiently, as they already know your history and have a working relationship with you.
Larger Down Payment
A traditional mortgage asks that you put down a minimum of 5% of the home’s purchase price, but banks will prefer that you put down much more than that, upwards of 20%, but this will give you better terms on the loan. A hard money loan from a private lender might be willing to lend you 100% of the purchase price, so without a down payment, you’d only have to pay the origination fee and monthly interest until the loan is paid off completely.