What is a Private Mortgage?
A private mortgage is a type of mortgage in which the borrower (potential homebuyer) secures financing from a private, individual lender or institution to purchase real estate.
These loans are comparable to subprime mortgages.
Individuals may choose this option if they don’t qualify for a standard mortgage or want to avoid red tape.
The loan is like a regular mortgage in that you have to pay back the loan plus interest by a certain date. If you default, the lender can foreclose on your home.
Most private loans have a short repayment period, between six months and three years.
After making on-time payments for this loan the borrower may be eligible for a mortgage from a conventional lender.
Private mortgage lenders charge much higher interest rates than traditional lenders.
Qualifying for a private mortgage is faster and easier than a conventional mortgage. Nevertheless, keep in mind that these advantages may also involve greater risk and/or higher interest rates and/or costs.
Unlike conventional banks, private mortgage lenders are not regulated, so you must ensure you find a reputable, trustworthy provider. We can assist you with this selection process .
If you miss a mortgage payment, some lenders are strict and will force a foreclosure or power of sale. Others, on the other hand, are more accommodating and will come to an agreement to assist you in keeping your home in the event of payment default.
You have a bad credit score; therefore, banks and other financial institutions won’t approve you for a mortgage or won’t lend you enough money to purchase a home in your desired neighborhood.
- You require the funds immediately and lack the time to wait for a typical lender to approve you.
- A typical lender will not finance the unconventional property you want to buy. If you want to buy a fixer-upper, inherited a house in bad shape and need help with repairs, or want to buy a commercial property, empty land, or a home in a rural area, a bank might be unwilling to grant you a loan.
- A short-term loan will get you by until your credit improves enough to qualify for a traditional loan.
- You are unable to demonstrate that you have the necessary income to qualify for a conventional mortgage.
- As a recent immigrant to Canada, you are unable to meet the requirements of conventional lenders. Traditional lenders may reject applicants with foreign income, foreign credit history, and a short Canadian employment history.
- You are self-employed and have inconsistent income.
Most real estate investors need money quickly.
Don’t let challenging bank procedures prevent you from taking advantage of real estate investing opportunities and buy-and-sell (flipping) deals!
We can help you find private mortgage loans that will allow you to buy properties, conduct multiple deals at the same time, and make you more money as an investor.
Our financing options are suited for real estate investors planning on flipping properties, or who are looking to buy properties quickly without having to go through the lengthy approval processes of traditional banking institutions.
Questions?
