Most mortgage loans come from banks, trust companies and credit unions. But there are some cases where turning to a private mortgage lender can have its advantage and is necessary. If you have bad credit or self-employed with a low state income, a Private Lender could be a great temporary solution to your mortgage needs.
Bank loans and private loans are relatively similar as they serve the same purpose which is help people become homeowners. The main difference is that private lending contains a shorter term with higher interest rates.
Often, equity (20% or more) or a large down payment is the easiest way to ensure you qualify for a private mortgage-especially when income is difficult to prove and credit is poor.
While a mortgage loan from a regular institution has no fee to the borrower, a private mortgage consists of a lender and a broker fee. These fees can often be paid up front or added to the amount of the loan. Most private lenders have a reputation of quicker approval processes, which can make them a favorable option when in need of quick financing at an increased interest rate.
To sum of private lending, it can be a great alternative solution for self-employed individuals, or those who have had bad luck with their credit history. It can be a quick process with a short term loan until you have more stability and better credit.
Everyone's situation is unique to their financial standing and needs. Book a free consultation with me to discuss your options.