Private hard money lenders have been in the business of providing loans and loan services to individuals who require hard money loans (loans collateralized by real estate.) Private hard money lenders may be direct hard money lenders or brokers of hard money lenders. Most private hard money lenders are, in fact, brokers. Some private hard money lenders are both brokers and direct lenders. In these instances, the private hard money lender generally funds one or up to a few small loans per year and serves within the broker capacity to clients for that loans they help to originate.
Deciding on whether or not to work with a hard money broker or perhaps a private hard money lender is similar to deciding on whether to purchase real estate using the aid of a broker/agent or if to create a deal direct towards the seller on your own.
The benefits of working directly with a true private hard money lender are immediately evident: You may sometimes save money by going direct. Brokers are paid for their services via a percentage of the points you pay on the hard money loan. Therefore, the greater brokers involved with an offer, the more you'll probably pay both in points and percentage to accommodate that cost.
For those who have opted for direct hard money lender who is a great match for your project, you will be able to talk directly using the decision makers, avoiding the 'run around' that a lot of hard money borrowers fall prey to. You are told that the loan goes through, simply to hear the next day that the lender has elected to not take on your hard money loan and now your loan is on another desk in another direct lender's office - or worse, around the desk of some other broker who may know a broker who knows a lender who may want to fund the loan. Sometimes, the option of direct lender relies more on the commission the broker will get than you are on your own interests.
With an immediate hard money lender, you can steer clear of the 'run-around' and may have the ability to close faster. In the end, nobody knows your circumstances like you do, no-one can explain any extenuating circumstances better than you can, and no the first is as committed to your business and your hard money loan as you are.
The benefit of working with a commercial large financial company is also clear: an experienced, well-informed, honest commercial large financial company will have the knowledge of and accessibility direct hard money lenders in Ontario, Canada, and also the United States. A commercial large financial company knows where the loan has got the best fit. A great commercial mortgage broker will help you 'package' your loan to your best advantage, assisting you determine how much to anticipate based on the equity in your property, kind of property you're collateralizing, how soon you have to close the deal, and much more.