How Hard Money Lender & Regular Mortgage Brokers Are Different
Category : Hard Money Loans
If your are in a mind set that Hard money lenders are just another type of mortgage brokers, then following are some of the points that will let you know that hard money lenders are actually very different from regular mortgage brokers.
Private lenders vs. institutions
Regular mortgage brokers work with institutions such as big banks and mortgage companies in-order to arrange mortgages, and make their money on points and certain loan fees. Under this process banks & loan companies focus more on closing costs and fees, so by the time the closing is over, the borrower has paid anywhere from a few thousand to several thousand dollars in fees, points and other expenses. By this more and more mortgage brokers are involved, the more points the borrower has to pay.
On the other hand, Hard money lenders, work directly with private lenders. Under this situation, if the hard money lender works with the private lenders individually, then for each new loan request, the hard money lender must approach each private lender until s/he has raised enough money to fund the loan. The money is then put into escrow until the closing.
Saving money with hard money lenders
Dealing with a hard money lender who has direct access to private lenders, one can save thousands of dollars in points and extra fees. Further using a hard money lender can help obtaining desired loan as you want with the mutually decided term & condition without impacting your personal credit. Furthermore if you can develop the right kind of relationship with the right hard money lender and private lenders, you too can be part of the “inner circle” of real estate investors who seem to find out about all the best deals first–and are building real wealth.