Simply put...
Are you having trouble getting your bank to say “yes” to a loan? If so, private financing could be the solution you are looking for. The mortgage finance world is always changing, shapeshifting lending rules for banks, credit unions, and other types of private mortgage lending companies, plus changing life circumstances for borrowers. Because of these factors, borrowers often feel confused and discouraged.
In these situations, a borrower might have success borrowing from private mortgage lenders instead. These can be individuals or organizations that offer private financing that typically has more flexible private mortgage rates, rules, and guidelines.
What are private mortgage lenders?
Private mortgage lenders are private professionals or organizations which lend out their own money.
What are the benefits of working with private mortgage lenders?
These days, it’s never been more challenging for a Canadian to qualify for a traditional mortgage from a bank. This is why private mortgage lending companies are an ever-growing segment of the Canadian mortgage industry. Here are the main advantages of getting private mortgage loans.
Private Mortgage Loans
Private mortgage loans are an alternative source of financing from a private lender and is usually used when a borrower is having trouble getting approval for a mortgage or refinance loan from a traditional bank or lending institution. They are typically short-term, interest-only loans that range from 3 to 6 months up to 3 years.
At Canadalend, our experienced private mortgage brokers specialize in connecting you with the best private lenders who can offer you the mortgage products that fit your unique financial situation.
The private mortgage lending companies that we work with understand that those guidelines used by traditional banks can be too stringent and that in many cases banks end up turning away borrowers who are perfectly capable and willing to pay back their mortgages.
Unlike traditional banks, private lenders will focus largely on the value and condition of your property instead of only looking at your credit score or income.
Quick Financing and Less Red Tape
Traditional lenders need to go through a lot of underwriting in order to complete the application for a traditional mortgage, which makes the process long and arduous for everyone involved. It usually also requires additional documentation such as credit checks, background checks, proof of income and more.
In comparison, private mortgage brokers can and will cut out most of that red tape. This helps their goal of matching every borrower with a tailored mortgage product. Private mortgage lending companies are able to facilitate a streamlined approval process that is solely designed to simplify access to mortgage financing by removing as many barriers as possible.
Instead of having to go through endless processes and paperwork, private mortgage lenders in Toronto & Ontario are able to request documents that are absolutely necessary to make an informed lending decision. This results in faster financing, with wait times for approval, loan processing, and fund release as short as possible, sometimes even as short as one day.
The Most Flexible Solutions at the Best Private Mortgage Rates
Because private mortgage lenders can enjoy regulatory freedom, they are able to offer borrowers a much wider variety of flexible financing solutions that can be personalized to meet the requirements of every individual borrower.
And, unlike traditional lenders, private mortgage lenders Toronto are able to offer a larger range of interest rates instead of a set rate. Plus, they are allowed to finance a wider range of properties like those under construction or other types of buildings that might be considered unconventional. Private mortgage brokers can also meet the demands of shorter loan periods if that is something you might be interested in.
Because private mortgage lenders are capturing the market share from big banks and financial institutions, this gives them even more incentive to provide more competitive private mortgage rates.
As highly flexible institutions, private lenders are able to customize a financial solution that fits the unique requirements of your individual needs, proving that private mortgage rates can be an effective solution for a huge range of borrowers, such as:
Borrowers with inadequate credit
Borrowers who are lacking in the credit department to qualify for a traditional mortgage are great candidates for private loans. Private mortgage loans can give borrowers the opportunity to boost their credit history, save for a bigger down payment, or build up their income, assets, or net worth.
Borrowers who are self-employed with unverifiable income
Individuals who are self-employed or those who have unverifiable or irregular sources of income are a quickly growing portion of private mortgage clients. While these borrowers might have the credit history necessary, they usually lack the income verification forms and documents needed by traditional lenders.
Bridge borrowers
Bridge borrowers are those individuals who need a short-term loan in order to meet time-sensitive obligations for available cash flow. Bridge borrowers can include homebuyers who are looking to purchase a new property who need to close on a deal quickly before selling their prior home, or until they are able to finance a longer-term loan.
Easy Qualification and Application Process
Private mortgage lenders can offer borrowers a wide range of advantages that traditional lenders cannot compete with. For example, it’s easier to qualify for a loan, and on top of that, the process to apply is quick. While traditional lenders are held by specific rules and regulations, using strict guidelines that are designed to disqualify as many applications as possible, private lenders take a different approach to their risk assessment.
A private lender's aim is to match you with a suitable mortgage, rather than disqualify you. Instead of zoning in on narrow factors like your credit history or income, private mortgage brokers will take a look at your property value as the main factor in getting your loan approved. They will also take into account a borrower’s assets, income and overall ability to take on a mortgage.
For more information about private mortgage rates, or if you’re looking to work with an expert team of reputable mortgage brokers, contact Canadalend today!