Are Investors Prioritizing Speed Over Rate?

Question

Feels like more investors value certainty and speed over headline rates lately. Curious if others are seeing the same trend.

Jay Hinrichs · Answer

I know my clients like speed and certainty along with limited to no red tape long application process's that get turned over to an underwriter that keeps pinging for more info.  U know the hassle factor.

When I was at BP con talked to one guy and he was only interested in rates and points period.. " I just talk to 10 lenders and have them compete for my business"  Not my kind of client.

there is a ton more to borrower lender relationships than just pricing.

Jeff S. · Answer

“Feels like more investors value certainty and speed over headline rates lately.”

This has always been true for knowledgeable borrowers. Bottom feeders aside, and who needs them, you will be out of business quickly if all you do is compete on price. Ask Kmart and Sears how that worked out.

One of the real advantages of private lending is the freedom to develop unique loan criteria. This means establishing robust competitive advantages beyond just rates and points, combined with a laser focus on your borrower relationships.

Likewise, if a borrower’s deal only works with a half-percent lower rate, it is not really a deal.

Timothy Hero · Answer

Rates will always be the main focus. Investors say speed is, but tell them another lender takes an extra 5 days to close, but the rate is 45 bps lower, and watch them be ok with waiting the extra 5 days.

Chris Seveney · Answer

@Jay Hinrichs - cannot agree more. We have one borrower who would only come to us for a very hairy deals and wanted screaming low rates. He would not give us the slamdunks so we just stopped doing business with them because they were too much of a headache, and trying to negotiate every single fee, including third-party fees, such as appraisals

Mike Grudzien · Answer

Spot on advice!  I concur.

Are Investors Prioritizing Speed Over Rate?

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