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.