4 Factors of Private Mortgage Financing
1) Time Constraints
Need to fund yesterday? Don’t hold your breath for conventional bank lenders. Private mortgages can fund within 24-48 hours of the initial request, making it ideal for time sensitive closings. For cases of emergency when equity in the property needs to be accessed immediately, or there is an imminent risk of foreclosing/eviction, a private mortgage on a short term is unparalleled in this aspect.
2) Credit History
Been rejected from the banks due to a bad credit history? For clients that need to rebuild their credit by consolidating existing loans or that have recently come out of bankruptcy, private mortgage lenders are willing to offer mortgages with no credit checks or income qualifications. Lenders build a deal primarily on the property value, location, and equity.
3) Employment or Down Payment Complications
If the stated income is non-confirmable, such as those who are self-employed, work seasonally or commissioned, then a private mortgage lender would be a good fit. Conventional bank lenders shy away from any kind of non-verifiable income, whereas private lenders do not require any income confirmation.
Down payment that is borrowed or gifted from non-family is also subject to rejection from chartered banks and prime lenders. For situations where the down payment on the purchase of a house comes in the form of vendor take-back, a line of credit, a personal loan or a non-arms length gift, private mortgage lenders are willing to work with you.
4) Unconventional Property
Is the property considered unconventional in some way? Examples of this are low populated rural areas with well water, Churches, gas stations, mixed-use properties, etc. Traditional prime lenders run the other direction with certain property traits, but private lenders are far more open with their personal criteria.