Of course , if time is not of the essence , a borrower should first attempt to obtain funding from a conventional lender ; however , borrowers should not be dismayed if they are turned down by banks . Alternative sources of capital are available for funding requested loans . One only need to do a little research . Many mortgage brokers , who deal with banks , also know of private lenders . If the borrower is able to go direct with a private lender , there may possibly be a cost saving to the borrower as there is one less mouth to feed ; however , many times , the mortgage broker can assist the borrower with expertise as to the pricing of private loans and which companies are reputable and which are not .
Why Banks Do Not Lend on Certain Loans that Appear Conservative
In bring a deal to a private lender , the borrower should be careful not to do a shotgun approach , which is to say that it may hurt the borrower in the long run to try many brokers at the same time for the same request . One may think this is the best way to obtain financing at the best price due to attempting to force competition , but , many times , it backfires on the borrower , as some brokers broker to other brokers . What often happens in this scenario is that there may be a chain of brokers involved , all adding their fee into the loan . A two point deal may turn into a four point deal because , by the time the loan reaches the final funding so many brokers claim they had a hand in the deal and all want to get paid . The borrower may find that a better plan of action is to find one good broker who is well connected with an array of lenders . Many times , this broker will know ahead of time what terms the borrower can expect and communicate this with the borrower , so there are no surprises . Some brokers specialize in construction loans [ as due some lenders ]; some will not touch personal residence loans due to the Dodd Frank regulations . It is best for a borrower to seek out a broker who is well versed in the type of loan that the borrower seeks .