When is Private interest rate of loan beneficial?

Question

I am working with an investment group who provides Private interest rate of loan,the interest seem to be higher (4.5%) than then traditional 30 year loan for investment properties(3.25%), it obviously doesn't sound beneficial ? am curious as when would folks prefer private interest ?in almost all cases the traditional 30 year loan seems beneficial

Timothy Hero · Answer

I broker for private companies with these rates. Here's the benefits:

• Not reported on credit
• 30-year fixed terms, whereas banks usually do 20
• No income, dti, or employment docs needed
• Since it's not on your credit, the loan doesn't impact your DTI

Trevor Alexander · Answer

@Jay Hinrichs Agreed! It's troubling as a Lender with so much misinformation.

Jay Hinrichs · Answer

I suspect the OP has run into a facebook fake lender who advertises rates that are not real trying to suck a person into sending them up front money then ghosting them.. its rampant and the rates he is mentioning are exactly what they post

Trevor Alexander · Answer

30 year investment rates are closer to the 4% range, and I would imagine private money is going to be more than 4.5%.

Main benefit of private money is to avoid jumping through the hoops and red tape conventional financing can bring. Think occupancy rules, property issues, amount down required, tricky employment situations, etc.

When is Private interest rate of loan beneficial?

When is Private interest rate of loan beneficial?

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