Most banks and institutional lenders typically need to satisfy strict lending criteria and are not willing to budge too far from the norm. As a result, they will shy away from such transactions.
Private mortgage lenders, on the other hand, are willing to fund such transactions based on the equity and location of the home. Effectively, they come in where the major banks or institutional lenders are not willing to go.
The concept is simple—Private mortgages can be an alternative source of financing for borrowers and are usually a high-return investment opportunity for investors.
If time is not on your side and you cannot wait for a long approval process, or if you cannot qualify for a regular mortgage from a bank or institutional lender, then a private lender may be the answer to your situation.
Private mortgages can potentially become a great financial solution for homeowners who are looking for alternative financing options in Toronto and across the GTA. If you are a homeowner in need of funds and are unable to get a mortgage from banks, then you can borrow the amount of money through private mortgages.
A private mortgage is simply a mortgage, which is given through investors other than banks. The investors or private lending bodies have more flexible lending processes, which are not as stringent and drawn out as conventional banks. In most cases you will be able to get a private mortgage as long as you are a homeowner and there is equity in your home. The loan amount you can get for a private mortgage will be based on the equity of your home.
When you are looking for financing options, it is very important to make an informed decision about the kind of loan that would be suitable for you. In order to decide whether or not you really need a private mortgage, here are a two important questions that you should ask yourself:
Do I Have Home Equity?
All homeowners who have a loan that is less than their home is worth, have home equity. The equity is basically the value of the house after the loan amount is deducted from it. So if you are thinking of taking out a second mortgage, an equity line of credit, or a private mortgage, you need to be aware of the value of your home.
Am I Really in Need Of Funds?
While home loans have been designed to ease your financial situation, it is always crucial to understand the urgency of your financial needs. Remember that while the loan amount will need to be repaid by you in smaller sums of money, this will still affect your monthly budget. If you require money urgently and are unable to get a bank loan due to the time factor or a bad credit score, then turning to a private loan could be the best option for you.
Situations where a borrower may require a private mortgage include financing for:
- Home renovation and construction projects
- Individuals who can’t prove their income by conventional means
- Debt consolidation or recovery from bankruptcy
- Income tax, property tax, or mortgage arrears
- Unique properties including cottages
At Canadalend.com we network with a large number of private investors and mortgage lenders who have helped our clients with private mortgage financing. So ease your financial stress by getting in touch with us right away and we will be more than glad to professionally help you choose the best refinancing option available in the market!
At Canadalend.com we have access to many private mortgage lenders in Toronto who are willing to take the risk that a bank or financial institution shies away from.