In the United States, 65% of homeowners have a mortgage and almost half of these originate from non-depository lenders. But, there are other ways to get a loan for a mortgage today and one of these is through private lenders.
Read on to find out more about how Atlanta private lending can help you with your mortgage.
Benefits of Choosing Atlanta Private Lending
Today, if you want to take out a mortgage with a bank or other financial institution, you need to tick all the boxes. This includes:
- A high credit score
- Verifiable income
- A large down payment
- All the documentation
Without all the above, you either won’t get the mortgage you want or it will come with high interests rates and various other tough repayment conditions. That’s where private money lenders come in.
A private lender doesn’t rely solely on mounds of paperwork and your credit score. In some instances, they can offer lower interests rates too. This is because lenders make more money by lending than they’d get from putting their money in savings accounts.
Different Types of Private Mortgage Lenders
There are two different types of private lenders. These are private personal lenders and private investment lenders. Here’s what you need to know about them.
Private Personal Lenders
Private personal lenders are people you know. While some may tell you that mixing your business and personal life is a big mistake, there are many advantages to borrowing from friends or family.
Here are some factors to consider:
- Always keep your loan agreement professional no matter the circumstances
- Don’t forget about the tax implications
- Be ready for the dynamic of your relationship to change
When it comes to borrowing large amounts of money from loved ones, make sure you keep your agreement separate from your personal relationship.
Private Investment Lenders
Private investment lenders are individuals that lend by weighing the risks versus the potential profits they can make. Because they don’t have to answer to other entities, these types of lenders often accept loans with higher risks.
Also, private investment lenders know that borrowers have fewer options and are more willing to take a loan with less favorable terms.
While these types of private money lenders may be your only option, it’s worth keeping in mind that interest rates can be higher.
Always Secure the Loan
When borrowing money, always secure the loan, even if you’ve been friends for years. Aside from giving the lender peace of mind, this can also help with taxes. As a borrower, you may be able to deduct the interest rates from your taxes but, you can only do so if you secure the loan.
Private or Hard Money Loan?
People opt for private lenders for different reasons. But, getting a loan with somebody you know can put a strain on your relationship.
Hard money lenders are a great alternative if you can’t get a loan from a bank or credit union and don’t want to ask a loved one. Plus, you may get your loan within a week of applying for it.
To find out more about Atlanta private lending, contact Hard Money Georgia today. With us, you’ll get fast funding to buy your dream property.