With tight government regulations on down payments, high-ratio buyers, and investment properties, it is increasingly becoming tough for Canadians to qualify for a mortgage and get home loans. Federal regulations are often an impediment in the way of an individual's ability to qualify for a mortgage. If you are self-employed or have faced credit troubles in the past, it is quite likely you may also be struggling on the home financing front. Hence, it is being seen that an increasing number of Canadians are opting for private mortgages for home financing. There are people who think of private mortgages as a feasible option while there are yet others who think of it only as the last resort, when everything else fails to work.
Private mortgage, in simple terms, is a home loan one can take from an individual or a private lender instead of a bank, who is the traditional financial lender. The way of working of private lenders is in sharp contrast to that of traditional lenders. It starts with their source of money which is in most cases, individual investors or even a group of them. This gives them the flexibility to make their own lending terms. This in turn means their application process is pretty flexible and they are not governed by strict laws enforced by any institutions. So if your financial situation is such that you fall out of the bracket of conventional money lenders, then a private mortgage is your best bet.
Who can apply for a private mortgage?
Those who want to buy land or a property which is unique, looking to renovate their current homes, are self-employed, want to invest in real estate, are low on credit, need access to home equity, consolidate high interest rate debt, want a short-term loan can apply for private mortgages.
How to proceed with private mortgages?
You must first approach a property broker who specializes in alternative lending. A broker can be of immense help via their wide network of trusted lenders. The broker can study your financial status and loan needs and conclude if you can be eligible for a private loan. What they consider is mainly your ability to make timely payments towards your loan. They then help you arrive at a solution to match your needs. They even make a structure for the deal along with the exit strategy. Private mortgages, since unsecure, look at the property as collateral, and such lenders lend on location. Extra charges include the fee charged by the broker as well as legal fee towards securing the mortgage.
Private mortgages are trending these days as many do not qualify for a regular mortgage by banks. There are a multitude of options for those looking for alternative lending.
If you too, have been unable to get a home loan, then regular way, and are looking at getting a home through a private mortgage, do write in to LendX. We would be happy to help.