8 Reasons Why You Should Work With a Direct Lender

The first step in working with a direct lender is finding the right company. There are many benefits associated with choosing direct lenders, but finding the right one for you can also be challenging.

Direct Lenders offer a very different lending experience to traditional banks and credit unions. These companies do not use brokers and work directly with borrowers and property owners to get a loan for a project.

Direct lender

Direct Lender Can Offer a Better Interest Rate

Direct lenders like Unified Funding Group can offer borrowers better interest rates because they don’t have to pay commissions to brokers. They can take the money that they save in commission and pass it on in the form of lower rates. For borrowers with good credit ratings, this means greater borrowing power because the interest rate is lower.

If you’ve had problems getting high rates in the past or think you might have problems because of your credit rating, consider working with a direct lender to get the best possible deal.

Direct Lenders Have Lower Mortgage Rates

Direct lenders can offer lower rates because they don’t have to pay as much to their investors as other lenders do (because direct lenders use their own money, not that of investors). 

Direct Lenders Offer Loans with Less Paperwork Direct lending companies don’t have to go through all the required legal steps for their loans because they lend their own money. 

Direct Lenders are More Flexible with Their Lending Criteria 

Direct lenders generally have no minimum and maximum income or credit score requirements. They typically look at the borrower’s ability to pay back the loan, as opposed to traditional banks who require an established source of income and enough reserve cash available in the bank account for three months’ worth of payments as well as 30% as a down payment.

Some direct lenders can lend up to 100% of the home’s value. Furthermore, they may also approve loans based on rent-to-income ratios instead of income-to-debt ratios. This means that if a borrower has reliable income from renting out several of their rooms, they may be able to qualify for a loan even if their monthly household expenses are high.

You Don’t Need to Put Up a Down Payment or Pay for an Appraisal, Which Saves You Time and Money.

Direct lenders don’t require down payments because they do not pool their loans together to turn them around and sell them to investors. They use their capitol to fund your loan, so you can invest the time saved in working on other parts of your project.

Additionally, you don’t have to pay for an appraisal when working with a direct lender because they do not rely on the value of your property to determine whether or not they are willing to lend you money.

A direct lender doesn’t need collateral, so you do not have to worry about putting up property when applying for financing.

Your Property Doesn’t Need to be in Perfect Condition – Some Lenders Will Even Consider Homes That are in Foreclosure.

The borrower does not need to be planning their home improvements with utmost care. Direct lenders are willing to lend money on properties in foreclosure, where the new buyer is required to fix or renovate it before final closing takes place.

Direct Lenders Will Consider Your Current Income – Some borrowers do not have enough income for a traditional loan, but there are still lenders that will lend to people with low incomes than others.

Direct lenders need to see that your job and income are stable, but they do not require a perfectly high salary. Lenders will consider other ways you might be earning money, such as dividends and other investment opportunities. Also, if you have a high amount of assets, you may use those as collateral instead.

If you’re Self-Employed, There’s no Minimum Income Requirement from the Lender.

Direct lenders do not typically require borrowers to meet a minimum income requirement. You may still need to show strong credit history, but many direct lenders will work with individuals that do not have traditional employment backgrounds.

Direct Lender Can Provide Loans for Non-Occupant Co-Borrowers

The “occupant co-borrowing rule” means that if you plan to use the loan proceeds for a real estate project, you cannot provide any part of your capital. It is common for borrowers to find someone else to lend them the money, but finding a lender that will work with non-occupant co-borrowers isn’t easy. Direct lenders do not have this restriction, and they may be able to help you secure the capital required for your project.

Here are 8 Reasons Why You Should Work With a Direct Lender

  1. Can be faster than traditional lenders – there is no need to wait for approval when working with an unsecured loan, unlike with other lenders.
  2. You are in direct contact with your lender – no more waiting on the phone to speak to someone who ultimately doesn’t have any say in whether or not you get approved.
  3. You are dealing with real people – Direct lenders are not just websites or call centers, they are real people who will take the time to talk to you and walk you through your loan application process.
  4. No broker fees – brokers charge high commission rates, which is built into the cost of your loan.
  5. No penalties – because you aren’t borrowing money from a bank or credit union, you don’t have to worry about incurring early repayment penalties if you decide that you want to pay off your loan early.
  6. Decisions are made quickly – the application process with Direct Lenders is much faster than with traditional lenders, so you don’t have to spend weeks waiting for approval.
  7. You are dealing with the owner of the business. When you work with online companies, they use the money you borrow to lend it out to other people, meaning you are ultimately borrowing from a nameless person at a bank.
  8. No broker fees – brokers charge high commission rates, which is built into the cost of your loan.

Description

Direct lenders offer a very different lending experience to traditional banks and credit unions. These companies do not use brokers and work directly with borrowers and property owners to get a loan for a project. They offer loans backed by their capital, which means that they can lend more money than other types of lenders because they don’t have to worry about someone else’s money and their own.