Who should apply for a private mortgage over a traditional mortgage? A private mortgage is an appropriate choice for a variety of individuals. After reading this article, you might have some more questions or you might want to apply for a mortgage; in either case, contact Familylending.ca.
Essentially, private mortgages are suited to borrowers who do not fit the criteria required by traditional lenders. Traditional lenders prefer to lend to low-risk clients and have fairly rigid expectations of what makes an ideal borrower. Not everyone can meet the criteria of traditional lenders, and this is where a private mortgage can help. A private mortgage operates in the same way that a traditional mortgage does; the fundamental difference being that financing comes from a private investor.
See if any of these situations apply to you:
- I have poor credit history: Private mortgagers are more willing to work with you than traditional lenders if you have poor credit.
- I need a mortgage quickly: You may be in a situation that requires you to have access to your mortgage in a quick turn-around period. A private mortgage transaction can be ready for you in as little as four to ten days, whereas a traditional lender typically requires upwards of 30 days.
- I’m expecting an influx of finances soon but I need money now to: If you’re waiting for your current property to sell and would like to close on a new property, bridge financing could be an appropriate choice for you. Traditional lenders generally aren’t interested in dealing with these short-term loans but a private mortgage company may be able to help you.
- I’d like to avoid CMHC fees: If you’re not able to provide a traditional lender with a 20% down payment of your property value you will need to pay CMHC fees. Private mortgage companies have the ability to work with you to avoid CMHC fees if you aren’t in a position to put forward a large down payment.
- I’d like help investing in upgrades to my home: Renovating a home can add value but there are usually substantial upfront costs. Taking a second mortgage on your home through a private mortgage can unleash the equity in your home to provide the cash flow you’ll need to upgrade your property.
If you answered yes to any of the situations above, a private mortgage may be well suited to help you achieve your home ownership goals.