Traditional lending vs. alternative lending: Why choose The Cash Source?

Real estate investors need fast funding to compete in today’s market. Housing inventory is low, and as of May 2021, the average home is selling in a mere 18 days. Yet, it still takes between 45-60 days to close a typical mortgage loan. That’s a substantial discrepancy.

With the market as competitive as it is, investors must have cash in hand — but getting financing from traditional sources is a clogged and troublesome process these days. That’s why many real estate investors are seeking out alternative lending options, like The Cash Source, for their property purchases.

Here’s how The Cash Source stacks up to traditional financing and other alternative lending options.

5 key differences: traditional lending vs. The Cash Source

To compare The Cash Source’s alternative lending solution to traditional lending, it’s essential to assess five key areas of differentiation:

  1. Credit check requirement: Any loan financed through a traditional lender requires a credit check. Even if an investor has pristine credit, the extra time it takes to run a credit check can sometimes mean the difference between closing the deal and losing out.

Additionally, many investors might have credit issues that make qualifying for a traditional loan more challenging, even if they’re completely capable of paying the loan back. As an asset-based lender, The Cash Source requires no credit check. Instead, underwriting is based on collateral value — not your creditworthiness. 

  1. The mortgage loan limit: With traditional financing, most people are limited to no more than four mortgages at a time. However, in today’s highly competitive market, when equity gains are abundant, many investors feel restricted by this limit.

At The Cash Source, there’s no limit to the number of properties a borrower can own. Investors can request (and obtain) alternative funding for as many properties as they want and enjoy the same advantages each time.  

  1. Underwriting process time frame: Traditional funding takes an average of 45-60 days. Real estate investors who want to compete don’t have that kind of time to sit around and wait. That’s why the underwriting process at The Cash Source takes only five days to complete, on average.

This rapid time frame allows real estate investors to stay competitive and request financing in real time. In fact, investors who choose The Cash Source can expect to save an average of 50+ days in waiting for funding.

  1. The interest rate: The average interest rate for traditional lenders sits at around 4%. The rate at The Cash Source is 12%. However, after any investor pays off three loans with The Cash Source, they become eligible for a discounted rate.

The interest rate will always be higher with alternative mortgage lenders like The Cash Source. It’s how they’re able to provide mortgage loans at such a rapid rate with zero credit checks. For most investors, the higher rate is worth the quick cash in hand. 

  1. Loan origination fee: Origination fees with lenders vary, but they typically range from 0-1% of the total mortgage loan. The origination fee with The Cash Source is comparable at around 1%.

Although the loan origination fee for The Cash Source versus traditional financing is comparable, when you consider all points of comparison, alternative financing with The Cash Source is the clear winner for investors who want to move quickly.

But how does The Cash Source compare to other alternative mortgage lenders?

The Cash Source vs. other alternative mortgage lenders

The Cash Source is very competitive in the money lending industry. On average, investors save at least half on loan origination fees when choosing The Cash Source over other alternative mortgage lenders.

Plus, The Cash Source can usually match (or beat) the interest rate from other short-term lenders. Best of all, there are no prepayment penalties. As a lender, The Cash Source isn’t looking to nickel and dime its customers.

Instead, the fees (interest rate and origination fees) are transparent and upfront, with no surprise charges down the road. If an investor wants to pay off their loan early, The Cash Source looks at it as a win. Rather than penalize the borrower, we reward those who pay back their loans and offer them better rates down the road.

The Cash Source prioritizes long-term customers, which is rare in short-term lending. Typically, alternative lending organizations want to get as much as possible from the borrower on the first transaction, never expecting them to return.

With better fees, competitive rates, no credit check, no loan limits, and an average turnaround time of five days, The Cash Source is one of the top alternative lending solutions for competitive real estate investors.

How to use The Cash Source for alternative lending

The truth is, you aren’t going to land real estate deals if you don’t have cash in hand. Even investors who prefer traditional mortgages use The Cash Source as a bridge until they can secure traditional financing. 

Ultimately, cash is king in today’s competitive market, and The Cash Source is the premier alternative lending source for hungry investors. Don’t miss out on a fantastic opportunity because you don’t have funding — apply for a cash loan online now for quick approval from The Cash Source.