Until recently, hard money was likely the least used and most misunderstood lending platform in the mortgage industry. The bank deregulations made it easy for borrowers to find cheap money easily, without having to come up with a huge down payment or provide any proof they could in fact afford to repay the loan.
Now that banks have tightened their restrictions, especially for the home investor, more and more real estate entrepreneurs are turning to private lenders for hard money loans. As a hard money lender in Arizona, we are often asked if we function like conventional banks. We do not.
One of the most common questions is “are we a direct lender?”
That’s always an excellent question, and whether you choose to work with Capital Fund I or not, you should ask this to every hard money lender you shop in Phoenix. This question is very important because many private hard money institutions in Arizona advertise themselves as being direct lenders, when in fact they are simply co-brokers.
They do not have legitimate access to capital, creating a chain of brokers that will undoubtedly come with a larger amount of fees. A true hard money provider has a source of direct funds, and no middleman to handle your loan.
That’s how Capital Fund I works. We service and underwriter all of our own loans, providing funds for your investment purchase on behalf of our investors. You will never have to worry about excess fees or dealing with the middleman in our business.
Next time you apply for a private mortgage loan, ask if the broker is a direct lender or if he is just the co-broker. Doing so will save you some time and money in the long run.