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What are the advantages and disadvantages of a private lender?

by efjbk642 from Latta, South Carolina. Apr 19th 2018 Reply


Mortgage from a lender goes on credit and is fair and legal. When you do private you are at mercy of home owner only people with bad credit do loan with private party.

Apr 19th 2018
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Private lenders are also called hard money, they are not licensed per say or held to industry (federal/state) real estate rules and regulations which widely protect the borrower and simultaneously keep the licensed lenders accountable. My company is licensed with Fannie Mae Freddie Mac and have our Ginnie Mae approvals we are held to the highest of standards and able to service most loans with the upmost service dedicated to you

Apr 19th 2018
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,765 contributions

Not sure exactly what you mean by private lender, but I assume you are referring to a private individual who lenders money. Generally these are only used by people who are not able to be approved by a traditional lender - usually because of poor credit. The main two disadvantages is they always come with higher rates, and they don't report to the credit bureau. They can also sometime be sketchy. The good thing is you can get financing. These are usually a last resort option.

Apr 20th 2018
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,428 contributions

More info needed.. specifically, what do you mean by "Private Lenders".. In our industry, a "Private lender" fills the gap for lending when you don't qualify for conforming type financing (FHA, VA, USDA, or Conventional).. we call them Portfolio lenders.. but you might recognize the term "Hard Money" lenders.. they would fall into the category of a portfolio lender.. Understand that ALL MORTGAGE LENDERS must be licensed and have active NMLS numbers.. so the comment about them not being held to a different standard is just not accurate. Portfolio lending will do the more risky loans, and because of such, they charge higher interest rates and fees, and require a larger down payment in most cases.. However, if by "private lender" you are referring to a mortgage broker or mortgage bank vs. a large bank, then even the small broker can do all the conforming loan types.. however, the typically are not as fast and efficient as a larger mortgage bank.. but them when you go with a large bank,, they are typically the worst when it comes to doing loans.. the machine is so big, and they have so many departments and divisions, your file get's lost in the shuffle and they become in efficient.. Stick with a mortgage bank as your first option.. they lend with their own money, sell directly to Fannie/Freddie/ and Ginnie.. and they only do mortgage loans.. no credit cards, savings accounts, car loans etc.. only mortgages.. the 2nd option would be a mortgage broker.. they will be less efficient, but typically not their fault.. brokers typically don't give any one lender enough business to get anything done faster nor are they able to ask for favors.. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Apr 20th 2018
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