What is a private mortgage?
A private mortgage is a type of loan that is not from a traditional lending institution such as a bank or credit union. The Private mortgage in Whitby term is usually shorter, with a one or two-year term. This allows the borrower to achieve his/her goals in the short term whether it’s improving credit score or consolidating debt. Private lenders are not subject to rigid bank regulations and are therefore able to offer more flexible terms and tailored options to borrowers. Below are some benefits of borrowing from a private lender.
Qualifying is easier:
When you attempt to receive a loan from a bank or mortgage lender, a lot of documentation is needed to showcase your financial situation, and sometimes the outlook doesn’t meet the lender’s requirements. The qualification process of a private lender is much more streamlined than traditional lenders. Private lenders undertake a holistic approach and can consider the unique circumstances of each borrower. Private lenders have more tools they can use in the qualification process, including the ability to rely more heavily on the equity position of the borrower.
Exceptional Interest Rate:
Using a flexible approach, private lenders offer tailor-made solutions and often offer a range of interest rates and meet borrowers’ unique requirements.
Depending on the lender, a borrower should be able to set up a loan package that may be more flexible with both parties than what would occur with a bank or other mortgage lenders. As long as both sides are content with the details of the agreement, then everyone will be happy.
Loan To Self-Employed Borrowers:
Provided there is sufficient equity collateral that can be registered on a property, private lenders can offer mortgages to those with unverifiable income like self-employed individuals and/or those with irregular income or other unique circumstances.
Short Term Loan:
Conventional mortgages often have an amortization period of 25 or 30 years with terms typically ranging from 3 to 5 years. On the other hand, private mortgages in Whitby require a short-term interest-only loan, and the borrower is usually expected to pay it back within the next 24 months. Although short-term financing can be beneficial for many, it can also be stressful having to figure out other ways to replace your private mortgage in Whitby when it comes due. A trusted mortgage broker in Whitby will help you plan your exit strategy to pay back your mortgage in a year.