Pros and Cons of Private Mortgage Lenders in New York

 

mortgage scrabble tiles

Mortgage loans allow companies to acquire commercial real estate to expand and facilitate their business operations. Banks and traditional lenders often reject loan applications if the borrower has a low income or bad credit score. In contrast, private mortgage lenders don’t, so most companies opt for them instead.

 

Here are some pros and cons of private mortgage lenders in New York:

Upsides to Private Mortgage Loans

1. Higher Chances of Qualifying

Private loans are secured and have higher interest rates than traditional loans. Therefore, private mortgage lenders don’t focus on low credit scores, past income, or disqualified applications. You have a higher chance of qualifying for a loan because private lenders are more interested in the property they’re investing in, not the borrower.

 

2. Quick Approval Process

Getting a mortgage loan from the bank is tedious, with extensive scrutiny and paperwork. In comparison, private mortgage lenders approve the applications in days or even hours, depending on the project.

 

3. Bridge Loans

Private lenders offer bridge loans or short-term loans to help you get started with your commercial property and convert it to permanent financing once you acquire enough revenue. This works best when a company needs to close on a deal quickly and refinance in the future. Bridge financing offers a flexible, convenient and cost-effective alternative to companies.

Downsides to Private Mortgage Loans

1. Higher Interest Rates

Since the lender is at increased risk as no property is served as collateral, they make up for it with a high-interest rate. However, they may reduce the interest rate if the borrower has a good reputation or financial standing.

 

2. Extra Fees

Private lenders charge you an extra fee in exchange for their service. There are some other fees involved, such as broker and legal fees.

 

3. Short Term Loans

Short-term loans are undoubtedly convenient, but they can be a problem for some businesses that have trouble with quick repayments. However, a trusted private lender will usually offer you a flexible repayment strategy.

 

Reliable hard money lenders in NY
 

Global Capital Partners Fund is a leading private mortgage lender that offers flexible repayment options and market-competitive interest rates. They provide commercial financing and acquisition funding programs to businesses in New York, Michigan, Florida, and other states of the USA. Their in-house underwriters make approval faster with a seamless closing. For more information, visit their website or contact them.

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