No, the distinction here is not that all private mortgage lenders are fast, but that if you need a mortgage approved and closed in a matter of days then private lending sources are likely going to be your only realistic option. But even then, you will need to be working with a private lender that is in the business of turning things around fast with their lawyer in order to satisfy your time requirements.
And in some cases you may end up having to a premium for speed, but depending on what you need the money for, the incremental cost of capital can be trivial in the big scheme of things.
So back to what makes faster mortgages come from private mortgage lenders?
In a couples of words, less complexity.
When you enter into a mortgage agreement with a bank or institutional lender, you are required to work within a mortgage closing process that is designed to take 10 business days. If the process gets bogged down with some details or the overall system is working through high volume, then the time period you are working with just got longer.
Add to this the fact that several people are going to have to “touch” your file and do something with it before the process is completed. Any time more humans are involved in any process, its likely the process will take longer on average to complete.
With a private mortgage lender who focuses in on faster close mortgage requirements, there are very few moving parts which are limited to the mortgage broker involved, the private lender him or herself, and their lawyer.
All parties are prepared to move quickly and provide priority status to your request due to the timelines you are working with.
In a fast close mortgage situation, the one element that typically will slow down the process is your own lawyer’s responsiveness to your needs.
Yes, there is a higher cost for getting a quick close mortgage in place from a private lender, but when time is short and your deal or transaction are about to run out of time, it can end up being your lowest cost incurred to complete the transaction versus the costs of not completing.