Traditional mortgage loans are not for everyone.
Unless you have a long and stable credit history or have sound financial
standing, your mortgage loan will not be approved from a typical bank or credit
union.
For example, if you are a freelancer with irregular
income or have not bought too many things on credit and thus have a short
credit history, your chances of getting a regular mortgage loan approved are
quite slim.
Therefore, even though that private mortgage loans
usually have higher interest rates than traditional mortgage, in some cases, a
private loan makes more sense and is more feasible.
In this quick overview, let’s take a look at 3 key
situations when a private mortgage lender in San Antonio is a better financing
choice than a traditional institute.
·
Speed of
the Process
Due to a lot of documentation and verification
involved, traditional mortgage loans are a time-consuming process. It can take
anywhere from 45-90 days to process and fund a mortgage loan.
Private mortgages, on the other hand, are processed
within a week to 10 days, max. If you are in a bit of hurry, a private mortgage
lender will be an ideal source of financing. Since they only need to appraise
the property, the processing time for the loan application is much quicker and
speedier.
·
Ease of
the Process
Traditional mortgages are complicated affairs. Again,
a lot of documentation is involved and then complex procedures that evaluate
the borrower’s ability to repay the loan. Here, the value of the property is of
way less important than your financial ability to remain committed to making
your loan payments. Since there are a lot of fluctuating factors involved, the
whole thing can be too uncertain and a total time-waste for some people.
A private
mortgage lenders in San Antonio will help you breeze through the process. With much
less documentation, and only a few factors to worry about (mostly the
property), no hassle is involved in processing the loan and you stand a higher
chance of getting a quick approval.
·
Short-Term
Financing
Whether you are buying a home or looking for
short-term financing so you can rehabilitate a property for a quick resell,
these hard money, property-based loans are a great way to get some quick
funding.
Most private lenders only deal in short-term loans – 6
months to 3-4 years. If you are entering the market as a real estate investor,
these loans can help you get your first few projects off the ground with
extreme financial ease.
Conclusion
In addition to these three key areas, a private
mortgage also makes sense when you have a low or poor credit score. Since your
property is the main asset on which the loan is granted, all you need to do to
secure the loan is to make sure you have chosen a property that doesn’t require
too much restoration and will likely retain its market value for the next 3-5
years.
