I will be honest…..A private mortgage is one of the last solutions for mortgage financing. We always try to explore all the borrowers’ options before we turn to a private lender as a private mortgage will come with a higher interest rate than conventional mortgages and an upfront fee will also be is charged. A private lender is not like a bank or big mortgage lending institution, it is a loan secured by real estate usually provided by an individual or a collaboration of individuals who have a large amount of capital they want to lend out in the form of mortgages. As you are borrowing from another person instead of a large institution, the decision to lend you money is subject to less restrictions and guidelines. With fewer rules, private lenders will take on higher risk borrowers so they will charge higher interest rates than say a bank would.
You should also be aware that rates and fees vary depending on the broker you are working with as they will most often be charging a fee for their services as private lenders do not pay them a commission like the other financial institutions do.
With a private lender, they are not looking for the usual things a banker asks for. They are okay if you can’t prove your income, were recently bankrupt, or have a low credit score. The MortgageGirls use their connections to multiple private lenders in order to find a private mortgage that fits your unique financial circumstances and budget. We already know that a private lender will charge higher rates and that is why it is so important to treat private financing as only a “temporary band-aid” and not a long term solution.
The MortgageGirls will work with you on an exit strategy before we even think about taking you to a private lender.
If you would like to know more about Private Mortgages or possible exit strategies- please do not hesitate to contact us directly or check out our new slideshare on The Who, What, Where, When & How of Private Mortgages.