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Why Independent Mortgage Companies Have Become The “It” Thing In Lending

Why Independent Mortgage Companies Have Become the “It” Thing in Lending

A recent Wall Street Journal article reported that almost half of home-purchase loans now come from independent mortgage companies, which say they can offer faster, cheaper loans than the big banks can. In fact, these independent mortgage brokers and lenders have claimed the largest share of the loan market held by non-banks in 20 years. It’s no surprise, then, that non-bank mortgages have become the “it” thing in the lending world, particularly for experienced investors, and that private lenders like 5 Arch Funding are positioning themselves for even bigger success in the future.

Casey Fleming, author of “The Loan Guide: How to Get the Best Possible Mortgage,” believes the trend toward brokers and private lending will continue. “There is no way banks can compete with a broker’s cost structure,” he says. “Banks have dozens of layers of management and ridiculous inefficiencies due to their bureaucratic nature. Brokers are lean, nimble, and cost-effective.”

The desire for streamlined efficiency is driving independent lenders to gain an edge in the loan marketplace. Direct lenders like 5 Arch Funding are equally adept in expediting the loan process for experienced investors, mortgage brokers, and private lenders.

Just as it does for other markets, supply and demand weighs heavily on the lending industry. “Every lender, regardless of size, faces the challenge of load balancing–keeping the volume in the pipeline just enough to keep the system busy, but not so much that it overwhelms the system,” says Fleming. “It’s a delicate balance, and lenders mess up on this all the time. When they do, they take forever to get a loan done.”

With direct lenders like 5 Arch Funding, the “forever” part of securing a home loan is removed of the equation. For experienced investors, 5 Arch can fund fix and flip properties within five business days and rental properties in as little as two to three weeks. All it takes to get the ball rolling is an online application. According to the Wall Street Journal, the expediency of securing a home loan via the web will be especially attractive to millennials, particularly those who are looking to secure jumbo loans.

As real estate markets flourish across the country, it’s important for experienced investors to secure capital quickly and easily to expand their property portfolios. 5 Arch Funding currently lends to investors in 11 states, including hot real estate markets like California, Florida, and Oregon. The company has plans to double their reach in 2016.


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* 5 Arch Funding Corp./NMLS ID # 1039184. 19800 MacArthur Blvd., Ste. 1150, Irvine, CA 92612; Arizona Mortgage Broker License # 0933148; Nevada Mortgage Lending License Number 5078; Oregon Mortgage Lending License Number ML-5475; CA Bur of Real Estate – Real Estate Broker Corporation License #01928500; California loans made or arranged pursuant to a California Finance Lenders Law License, # 603K373. Louisiana Loan Broker Notification 43472334F. 5 Arch Funding Corp. makes first lien mortgage loans. In certain states, 5 Arch Funding Corp. only lends to entities. BorrowBetter is the service mark of 5 Arch Funding Corp.

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