5 Reasons Why Private Money Lenders Are Dominating The Mortgage Market
In the past few years, non-banks and private money lenders have emerged to dominate the mortgage market with products such as short-term hard money loan and long-term mortgage. This would seem quite unprecedented to the everyday individual, since less than a decade ago, 50 percent of all new mortgages were provided by major banks in the United States.
However, that was in 2011. The mortgage industry has now evolved to the point where private money lenders now lead the space.
Private Money Lenders Have Better Processing Requirements
As opposed to banks that are notorious for rejecting mortgage applications citing disqualification by marginal requirements, private money lenders have demonstrated that they are less stringent in processing potential borrower’s applications. In most cases, they even process, approve and lend to those applications that have already been rejected by banks and still get to successfully profit from their decision. This makes hard money lenders a viable option for many borrowers.
Their Closing is Faster and More Efficient
Where banks take more than a few weeks to reveal their judgment over a borrower’s application and in many cases still return with a negative answer, private money lenders not only process the application in a lesser time frame but also end up providing their approval more often than not. This reliance on processing applications faster and with a higher chance of disbursement once again makes borrowers prefer private lenders over banks.
They Also Provide Short-Term Financing Options
Several hard money lenders are known to facilitate borrowers with short-term options that range from time spans as low as 6 months to 3 years, such as in the case of bridge loans. In terms of traditional mortgage, the options also seem to be borrower friendly, where they can provide banks’ cited duration of the total loan a run for its money. This flexibility to pay-off their mortgages faster also makes borrowers prefer private money lenders.
Their Mortgage Comes in a Variety of Options
It is no secret that private money lenders offer products that are known to be subversive in terms of financing, but which at the same time remain highly relevant and effective for the end user. With options such as specific renovation, acquisition and hybrid executions, the variety of choices which hard money lenders provide tremendously sets them apart from the competition.
Their After Sales Service Remains Exceptional
While small-scale lenders leave a lot to be desired in terms of support, large scale private money lenders who are highly capable in delivering end products to borrowers also ensure that they remain available for them long after the closing process has been completed. This notion of being helped leads borrowers to trust them more with their requirements, and recommendations that they provide to their circle of family and friends goes a long way in terms of word of mouth marketing.
This Seems Like Only the Start
The mortgage market has evolved to welcome private money lenders with open arms. It seems that these private lenders have found their calling in this industry which has been looking for reliable options not only protect the lenders’ interest but also meets the needs of a variety of consumers as well.
It is certain that hard money lenders might rise in demand and become more prevalent as the years progress.