As stated above, private lenders loan money but are not part of a bank or affiliated with a government agency, which means that they can offer more flexible loan terms.
Private lenders are companies or individuals that loan money but are not part of a bank or affiliated with a federal government agency, enabling them to offer more flexible loan terms. In this context, the adjective “private” does not connote that the company is privately held. There are private lenders that are publicly traded companies. The most common types of private loans are personal, business, and real estate.
Private personal lenders make a variety of term loans to finance consumer purchases that you might otherwise finance on a credit card. For example, these lenders might provide you a loan to finance your wedding or a vacation. A personal private loan is a personal finance tool ideal for borrowers with a strong credit history and who can afford a monthly payment.
Private business lenders offer a variety of different types of financing products to help you grow your business. You might use this type of financing to buy business equipment or to finance your inventory or accounts receivable. Business private money loans are easier to obtain than a loan from a traditional lender.
Private mortgage lenders can offer a variety of non-standard mortgage products ranging from extra large home loans to loans to finance investment properties, including vacation rental properties and commercial properties. Real estate investors have an easier time obtaining private real estate loans than they would a conventional loan from a traditional mortgage lender.
Visio is a private mortgage lender that specializes in financing for single-family rental properties, including vacation rentals. Visio, because it is not part of a bank and does not lend on government programs, can offer loan products with features and loan terms that meet the unique needs of real estate investors.
Private money loans are easier to qualify for and have more flexible loan terms than other loan types. However, a private mortgage also has a higher interest rate and fewer protections than a traditional mortgage.
Further, private lenders create their own guidelines and processes, and therefore have more flexibility compared to traditional lenders. For instance, a private lender could be a family member lending their own money with their own payment schedule. A traditional lender is going to lack flexibility yet have fewer risks.
As we have reiterated, a traditional home loan is more affordable and less risky than a private loan. There are, however, some use cases where working with private lenders makes the most sense.
Here are some borrower types who should work with a private lender:
A borrower with poor credit history: Private lenders can lend on their own criteria and determine at their discretion your financial situation
A borrower looking for personal money: Often, if you need money for a car or a wedding a family member may be willing to give you the best terms
A borrower looking to grow their portfolio of rental properties: For professional investors with multiple mortgaged rentals, a traditional home loan or financing from a bank have very stringent requirements
Visio Lending has originated over $1 billion in private mortgages for rental properties, more than anyone else in the United States. Our leading loan products, proven process, and substantial experience simply cannot be matched. Let’s take a deeper dive into what makes us a superior private mortgage choice for investors:
Direct lender: While most lenders resell someone else’s loan product, Visio is one of very few direct lenders to real estate investors. By cutting out the middlemen (yes, plural, as in more than one of them), you get a better loan product and a smoother borrowing experience.
Insurance: Insurance on a rental property is quite different from your personal home. Even many insurance agents who don’t regularly deal with rental properties don’t understand the nuances. Visio’s internal experts can help you properly insure your rental property investment.
Vacation Rentals: Visio is one of the leading financiers in the U.S. of vacation rental properties. Underwriting these properties for permanent mortgage finance is more of an art than a science. Nonetheless, Visio has developed a proven methodology to underwrite these properties to get you the best terms possible while also writing a responsible private mortgage loan.
Guide to Visio’s Residential Rental Loans
Check with your Account Executive for program availability and specifications