PRIVATE MORTGAGE

Private Mortgage

Some borrowers might not be able to qualify for a loan from a traditional lender. Banks require a lot of documentation, and sometimes, a borrower’s finances won’t appear to be sound enough for the bank’s preference.

Even if you’re more than able to repay the loan, mainstream lenders are required to verify that you can repay, and they have specific criteria to complete that verification.

Guidelines and restrictions are a big reason someone may look into getting a private home loan instead of one from a traditional mortgage lender. A private mortgage could be an option for borrowers who may have a hard time qualifying for a loan based on their financial situation, credit history and the type of home they wish to purchase. However, the loan can be riskier and can be damaging to finances and personal relationships.

“The process of getting a private mortgage can be much faster and easier than qualifying for a traditional mortgage.”

How to get Private Mortgage?

Private mortgages are offered by individuals, syndicates, and mortgage investment corporations. An experienced mortgage broker may be able to put you in touch with a reputable private lender, or you can search for one yourself.

While getting a private mortgage is generally faster and easier than qualifying for a mortgage with a bank, you’ll still have to meet some eligibility requirements. To qualify for a private mortgage, you need to have:

Proof of income: You’ll need to demonstrate that you have the income necessary to make mortgage payments. This can be tricky if you’re self-employed, and you may be required to provide extra documents.
Down payment: Usually you’ll need a minimum down payment of 15% of the purchase price to get a private mortgage.
A sellable property: If the borrower defaults on payments, the lender will want to be able to take possession of and even sell the property to recoup their investment.

Even if you’re more than able to repay the loan, mainstream lenders are required to verify that you can repay, and they have specific criteria to complete that verification.