Category Archives for Private Mortgage Lender
Markham Private Mortgage
“We’ve Got Markham Private Mortgage Loan Financing Available for Residential, Commercial, and Construction Property Financing Requirements”
If you’re in need of a Markham private mortgage financing on real estate you presently own or are looking to acquire, we certainly would like to help.
We place Markham private mortgage loans with our clients in Markham and through out the rest of the Greater Toronto Area as well as the rest of Southwestern Ontario.
Similar to bank or institutional mortgage lenders, private mortgage lenders each have their own areas of focus and geographic areas of coverage. For any given project, its going to be important to focus in on the private mortgage lenders that going to be able to fund your project and stay away from the one’s that most likely can’t, or will at above market rates and fees.
This can be challenging to accomplish as most private mortgage lenders do not have a direct street front or retail function of their own and primarily utilize mortgage brokers to place their funds.
The challenge with working through a mortgage broker is that it can be hard to tell if a mortgage broker has direct assess to a private mortgage lender that is well suited to your requirements, or if they are working through a number of other brokers just to get access to a private lender that may or may not be of any use to you.
We are fortunate to work directly with a number of private mortgage lenders that provide mortgage funding for a number of different private loan requirements in the Markham and surrounding area. For example, we place private mortgages for residential property refinancing, commercial property acquisition, construction financing and construction bridge loans, fast close mortgages, land acquisition, and land development loans to name a few.
One of the great things about the private mortgage market these days is there are more and more lenders coming into the market all the time due to the higher security and predictability private mortgage returns provide versus the stock market. The key is to be able to efficiently access what you need and get it in place when you need it.
If you have a Markham private mortgage funding requirement, please give me a call so I can quickly assess your requirements and providing you with relevant private mortgage financing options for your consideration.
Click Here To Speak to Markham Private Mortgage Lender Joe Walsh
Vaughan Private Mortgage Broker
“Using a Vaughan Area Private Mortgage Broker Can Save You Time and Money”
If you’re looking for a Vaughan private mortgage broker, then you’ve come to the right place. Located just south of Vaughan’s city limits, we supply private mortgage placements to area clients.
One of the keys to successfully locating and placing private mortgages in Vaughan is working with someone who has local funding sources as private lenders tend to stick to more localized geographic areas compared to many of the bank or institutional lenders.
We are fortunate to have very strong private lending sources that service the Vaughan area as well as neighboring areas in the Greater Toronto Area. These private lenders will provide private mortgages for both residential and commercial projects as well as a large variety of real estate types within these categories.
Because we maintain ongoing relationships with our private lending sources, we have a very solid grasp on what their looking for in a mortgage deal which allows us to match up borrower requests with the right lending source. This is not a trivial issue as borrower/lender fit can be very important, especially when you’re looking at a construction financing project or large commercial or industrial complex.
Because most private mortgage lenders work through mortgage brokers to source their deals, its practically a necessity to work with a mortgage broker if you expect to get the best rates and terms available for a given real estate property and/or project.
And right now, the market can be quite competitive on certain deals, so it’s likely going to be in your best interest to utilize the services of an experienced mortgage broker with private lender connections to source the private mortgage you’re looking for.
In situations where mortgage financing is required in a very short period of time, private mortgages can also provide fast mortgage closings which can take place in as little as 2 to 3 days, provided you’re working with a mortgage broker and private lender that have a focus on fast or quick close mortgage requests.
If you’re trying to locate and secure a private mortgage, then you should definitely consider working with a Vaughan private mortgage broker in order to get the best results in the least amount of time.
Give us a call if you have a private mortgage financing need you’d like to discuss.
Click Here To Speak To Vaughan Area Private Mortgage Broker Joe Walsh
Brampton Private Mortgage Lenders
“To Locate Brampton Private Mortgage Lenders, Give Us a Call Today For Immediate Assistance”
Brampton private mortgage lenders are made up of individuals or small lending corporations in Brampton or the surrounding area.
Private mortgages can be acquired for residential and commercial real estate property purchase, refinance, debt consolidation, or construction.
While some private lending groups have direct access to the public, most work through mortgage brokers to place their funds into the market place.
As a result, it makes a great deal of sense to work with a mortgage broker that works with private lenders that service your area in order to locate and secure the best available options.
Like all mortgage lenders, private mortgage lenders have their own focus areas within a given geographic area. They will also have different pricing and different tolerances to risk. So from one property and financing profile to the next, there can be a significant difference in the private lenders that will be interested in the deal, even within the same geographic area.
Brampton private mortgage lenders, similar to privates in other areas, are basically broken down into two groups. The first group is what we would call a more traditional private mortgage lender where the lending decision is primarily on the property and the lender is more than prepared to take over the property if necessary on a payment default in order to recoup the mortgage principal.
The second group, while similar to the first, act more like a bank in their assessment process and do not tend to do deals where the exit strategy projected to be in place to pay back the proposed private mortgage isn’t very strong. While a foreclosure scenario is still a higher risk for any private lender, this second group would prefer to only focus on lower risk private mortgage lending opportunities.
One of the many benefits that private mortgage financing provides is a much similar and faster decision making process than a bank with mortgage funding also capable of being completed in a matter of days compared to the 2 week requirement most banks and institutional lenders tend to go by.
If you’re trying to locate Brampton private mortgage lenders, I suggest that you give me a call so I can quickly assess your mortgage requirements and provide relevant private mortgage options for your consideration.
Anatomy of a Fast Mortgage Loan
“To Get a Toronto Fast Mortgage Loan in Place, Here’s The Essential Elements That Are Required”
If you’re in need of a Toronto fast mortgage loan, then there are a number of things you’re going to require to get something in place in the time you have available to work with.
First, when we’re talking about a fast mortgage loan, we’re speaking in terms of getting a residential mortgage committed and funded in from 2 to 7 days. The typical period required from start to finish is 2 to 3 weeks.
Second, you need to have all your paper work in order so that there are no delays trying to procure documents or complete agreements. If you’re trying to purchase a property, you’re going to need a completed purchase and sale agreement or properly executed offer to purchase. While a recently completed property appraisal may not be essential, it will likely be required if you’re looking at financing more than 50% of the cost of the real estate. You will also need immediate access to any down payment that may be required.
Third, you’re going to need to be working with a private mortgage lender that makes it a practice to provide a fast turnaround on these types of residential mortgage financing requests. The private lender is likely going to have to be working in your region already in order for them to get comfortable with the subject property value in the least amount of time. The lender may need to come and do a property inspection as well, so the closer the real estate is to the private lending source the better.
Fourth, the transaction is going to have to be executed, registered, and disbursed through a lawyer that is available and prepared to bring your deal to the top of their pile.
Fifth, and perhaps most important, you will need to be working with a Toronto mortgage broker that is experienced at bringing everything together in the time required. Most private lenders work through mortgage brokers, so this is typically the best way to locate the right type of mortgage sources. Mortgage brokers that work with private mortgage lenders will also have relationships with real estate lawyers that can get the legal work completed.
If you require a Toronto fast mortgage loan, give me a call so I can quickly assess your situation and provide relevant mortgage options with a few hours. If I can’t help you, I’ll tell you right away so we’re not wasting the limited time you have available.
Private Lenders In Toronto
“Here’s How To Locate And Secure Private Lenders in Toronto”
When we are speaking of private lenders in Toronto, we’re talking mostly about individuals or small corporations that provide real estate mortgages for residential, commercial, and industrial purposes.
The growth of private lenders in recent years has been significant as more and more investors become disenchanted with the stock market and the lackluster returns they have gotten over the past decade or more.
The result has been a growing supply of private mortgage financing sources that more and more people are taking advantage of.
Traditionally, a private lender was considered to be a hard money loan provider that would basically only lend on bad credit cases for very high rates of interest.
But the business of private mortgage financing has evolved into the main lending stream, providing competition and real alternatives to banks and other institutional lenders.
While there’s lots more of them around, and the use of their services can be applied to a lot of different situations, they still aren’t that easy to find.
Mortgage investment corporations that are created to manage and place mortgages for private lenders do advertise and have store front locations for the public. But this represents a very small percentage of the overall Toronto private lender market.
The majority of private lenders work through mortgage brokers and allow the mortgage broker to be the front line contact with the customer, many times not wanting to be directly involved with the borrower themselves.
And while there is a well developed mortgage broker network, with most mortgage brokers having at least some direct or indirect access to private lenders, the best access to private mortgages is through Toronto mortgage brokers that maintain very active relationships with their private mortgage sources.
The reason for this is that a private lender will have their own unique way to look at a deal as well as the information they want to see and the manner in which they administer mortgage requests. Having a working relationship with a number of private lenders provides a much stronger connection to the money you’re looking for versus through a mortgage broker who knows where to refer private money requests only.
Because of my strong private lending relationships here in Toronto, I recommend that you give me a call if you have a private mortgage financing requirement or have one that you would like to discuss with a mortgage professional that specializes in this area of mortgage financing.
Mississauga Private Mortgage Solutions
“How to Locate and Secure Mississauga Private Mortgage Solutions For Your Residential or Commercial Property”
One of the benefits of today’s mortgage market place is that there has been an increase in the amount of private money that is available to borrowers, especially in the Mississauga and Greater Toronto Area.
The hard part with private mortgages is locating private mortgage lenders in the first place and then trying to determine if they are the best fit for your deal.
Most private mortgage funds are placed through mortgage brokers as they have better direct access to the market needs than an individual private lender or private lending corporation.
But mortgage brokers can’t always provide you with the best available options for private money as they will likely only be working with a small number of privates. Some won’t work with any directly, but will try to access private lenders through other brokers.
The reason why its important to be able to shop the market for private mortgage loans, especially in strong real estate markets like Mississauga, is that private lenders have gotten more competitive on the better deals with interest rates rivaling bank or institutional rates in some cases. If you take the first deal that comes along, you may be paying more than you need to.
A second point to keep in mind is that even though there is a lot of private mortgage money around these days, it can come with very different focus areas. Some private lenders may primarily only do commercial mortgage deals, and even more specific, commercial construction. If a private lender gets a deal outside of their primary focus, the rate is likely going to be higher due to greater unknown risk. This could result in you paying a significantly higher rate than what’s available in the market for your deal.
The third point I would make is about time. If you’re pressed for time which can be the case with many private mortgage deals, then you want to immediately be focusing in on highly relevant lenders that are going to be the best fit for your deal. If you’re not working with a mortgage broker that is well positioned for your needs, a lot of time can get wasted and higher costs incurred in the long run.
If you have a private mortgage financing need, give me a call so I can quickly assess your requirements and immediately get you in touch with relevant Mississauga private mortgage lenders.
Bridge Mortgage Toronto
“Here’s How to Locate and Secure Toronto Bridge Mortgages For a Variety of Real Estate Transactions”
Do you have a real estate deal that threatening to fall apart due to your inability to locate and secure the required mortgage financing?
Do you have a financing need that hinges on leveraging a piece of real estate property to secure a short term mortgage?
Are you involved in a construction project that has run out of money and needs some additional capital to complete the work?
In all these scenarios and many others, a Toronto bridge mortgage may very well be the solution you require.
Remember that a bridge mortgage by definition is for a short period of time that has a defined beginning and end date and a solid exit strategy for repayment. When these conditions exist, a bridge mortgage may be able to be arranged in very short order.
In some respects, most private mortgages are bridge loans in that they are typically only issued for a term of one year or less. There are exceptions to this, but for the most part private mortgages are very short term in nature.
The keys to being able to secure a bridge mortgage in Toronto is to work with a mortgage broker that has a focus on bridge financing requests and works with lending sources that provide bridge mortgages in your immediate area.
This is key for a number of reasons.
First, by working through a well established mortgage broker, the lending sources you are exposed to are likely going to be legitimate private lenders that have been pre-qualified by the mortgage broker and with which the broker has an ongoing relationship. There are all sorts of real estate lending scams out there, so you want to make sure you’re avoiding potential sources of financing that will do more harm than good.
Second, private money is very regional in nature, so unless you’re working with a local source of financing, its unlikely you’re going to be successful securing financing in the time required.
Third, different sources of bridge mortgages in Toronto will focus on different types of financing requests. By working with an experienced mortgage broker, you will end up talking to relevant sources of bridge mortgage financing sooner which will get your financing in place that much faster.
Bridge mortgages in Toronto will cost more than a bank mortgage, but the added cost is for speed and a certain amount of application flexibility that you may not get working with a bank or institutional lender.
If you require a bridge mortgage in Toronto, I suggest you give me a call today so I can quickly assess your requirements and provide relevant local options in as little as a few hours.
Ontario Private Mortgage Financing
“How To Locate and Secure Ontario Private Mortgage Financing”
First of all, if you’re in search of Ontario private mortgage financing, are you sure you have exhausted all the institutional or bank related mortgage financing options? If you have more time to locate financing, you may be surprised at some of the options that could still work for you that would be more cost effective than private money. There are hundreds of mortgage programs out there, each with their own focus area in the market, which can provide options you may not be aware of.
If you definitely need a private mortgage for a residential or commercial property, then here are some things to keep in mind.
First, in order to secure the best deal, its going to be important to focus you efforts more on the local market where the subject property is located. Private mortgage lenders are very regional for the most part. So the more comfortable a lender is with a property, the more likely they are to approve financing and provide better rates as their comfort level in the property as security will be higher and perceived risk of loss lower.
Second, make sure that you’re working with a mortgage broker that has private money sources in your area. There are a couple of reasons for this. First, private lenders in most cases do not access the market directly themselves and tend to work through brokers either through a network or an exclusive arrangement. Second, a well established broker is more likely to connect you with a private mortgage lender that is reputable due to the fact that the mortgage broker has a reputation to maintain and doesn’t want you to have a bad experience.
Third, make sure that the terms of the private mortgage are going to work with your long term financing plan. For instance, if a private mortgage lender offers you a one year interest term, is that going to be enough time for you to get alternative financing in place to pay the private lender back? Alternatively, if the private mortgage loan is only required for a few months, can you get the private lender to provide you with an open interest term after so many months have passed?
If you need private mortgage financing in southwestern Ontario, give me a call so I can quickly assess your requirements and provide you with private mortgage lending options that are relevant to your needs.
Fast Mortgage Lenders Are Private Lenders
“Fast Mortgage Lenders Are Defined By What You’re Looking For And The Time You Have To Work With”
Most people who’ve ever gotten a mortgage won’t put mortgage and fast in the same sentence. As we now live in a world of instant gratification and results, it can be difficult to comprehend something that can take days, weeks, even months to accomplish.
So when we speak of fast mortgage lenders, fast is a relative term.
If you’re seeking the bank or institutional mortgage at rock bottom rates, fast would be anything done in 2 weeks. And when I mean done, I mean from the time of application to mortgage disbursement, the whole process would only take no more than 2 weeks. That would be very fast for this type of residential mortgage financing.
But if you’re talking fast as in the fastest possible time period to find a mortgage and get it into place, the answer would be 48 hours or less.
For some people, that still wouldn’t be considered fast, but if you’re on a tight deadline and trying to get mortgage financing arranged quickly, then a getting a deal done from start to finish in a couple of days is equivalent to warp speed in the world of real estate mortgages.
Speed relates to complexity and bureaucracy. Remember that the bigger the company you’re working with, the more moving parts, the longer things are likely going to take. While there are exceptions to just about anything, this rule is pretty typical in the mortgage financing world.
Also remember that low cost mortgage is low risk, so lenders are going to want to see and verify more stuff before they start advancing funds. As a result, cheaper money is also rarely fast.
This leads us to the world of private mortgage lenders. In many cases, these are individuals that are working directly with a lawyer. There are no layers of decision makers and procedures to go through. Decision making is largely based on the lenders existing knowledge of the market and with the aid of today’s online technology, a property can be assessed for value in a matter of minutes.
Once a decision is made, most communities now possess on line mortgage registration allowing a residential property mortgage to be set up right from the lawyer’s office in a matter of minutes.
Just remember that this type of speed does cost more so its relevant only to those who actually do need something done as fast as possible to justify the added cost.
If you need to locate and secure financing from a fast mortgage lender, please give me a call right now so I can quickly assess your situation and provide relevant options to you in the next few hours.
Short Term Bridge Loans Can Save Your Deal
“If You Have a Real Estate Deal That Needs to Close, But Your Financing Has Fallen Through, a Short Term Bridge Loan is Likely The Answer”
Its not uncommon for mortgage financing to fall apart prior to the purchase being completed, leaving the buyer/borrower scrambling for money to close the deal.
This can be more common than you think and is probably the most common in condo market where a buyer can enter into a purchase agreement and get financing arranged years in advance of when the condo can actually be sold.
Over the time of condo construction, which can take three or four years in some cases, the buyer’s credit rating or level of earnings has eroded to the point that he or she no longer qualifies for the mortgage. Many times this is not discovered until the buyer is in the closing process, leaving very little time to find an alternative method to close the deal.
And the cost of not closing on time can be considerable. First, the buyer can lose their deposit that they paid years in advance to secure the purchase in the first place. Second, the seller can sue the buyer for breech of contract creating more cost and hassle.
The most challenging aspect of this whole scenario is that the buyer can literally have a couple of days to secure alternative financing. And while they may vary well be eligible, an institutional lender is not likely going to be of any help as they can’t move fast enough to accommodate the buyer’s requirements.
If time is literally of the essence where you may be down to your last 48 hours, a short term real estate bridge loan is likely going to be your best option to save the deal. Once in place, you can restart the process for looking for a lower cost institutional mortgage that will pay out the bridge loan when it is located and secured.
The key to getting a bridge loan in place in time is to know where to look for one. Most real estate bridge loans are provided through private mortgage lenders that place their money through mortgage brokers. So the key is to work with a mortgage broker that deals with these types of financing emergencies and has the types of funding sources readily available so funds can be arranged and advanced in the time available.
If you find yourself in similar circumstances to those described above, then give me a call today so I can quickly assess your requirements and lay out your options. I work with these types of requests all the time and have been successful in getting bridge loans in place in just a matter of a few days.
Why Private Mortgages Make Great Bridge Loans
“If You Need To Get Financing On a Property Fast, a Private Mortgage May Very Well Be The Answer”
In the world of finance, especially these days, there is a group of words that’s seldom used when speaking about getting commercial financing in place. If you haven’t already guessed it, I’m talking about words like speed, quick, fast, immediate, right away, in the bag.
Business financing takes time to get in place and in many cases its time you don’t have.
Here are a few examples.
The bank calls your demand loan for no reason other than they can. Your suppliers cut back your credit because they feel like it. You’ve got a purchase order in hand that can double your business, but you don’t have enough money to cash flow the deal. You’re behind on your government payments that you’ve got 60 days to pay up or they’ll seize your bank accounts and call your customers directly for payment of your receivables. The property you’ve been dreaming about getting finally has come on the market, but you only can hold on to the right to buy for 30 days. You’re in the middle of a construction project and you’ve run out of money. etc. etc. etc.
In all these cases, money is required and its required fast, quickly, right away.
And one of the only truly fast ways you can get money these days is via private mortgages on real estate.
Now of course you need to have a piece of real estate that someone is interested in mortgage financing that has some equity in it. And you should have a basic package of information together including a recent appraisal and potentially an environmental report. These two pieces of information are something you should always have done in the last 5 years so you can quickly leverage a property.
You also have to have the willingness to pay more than prime plus one on the mortgage. Private lenders are not cheap, but when you consider the costs you may be incurring for not getting the money in time, or the opportunity cost being lost, the price of a private mortgage can pale in comparison.
So how fast is fast.
Well, for some private mortgage scenarios where everything is readily available to the lender for review, a commitment and disbursement can happen in a matter of days. That’s right, days. Not weeks and months, but days.
Of course, in most cases the process may take a week or two, but compared to the alternative, you’re talking about a rocket sled on rails.
If you have a need for cash right now and need a source of bridge financing for a piece of real estate you own or are trying to acquire, then give me a call right away so I can quickly assess your requirements and come up with relevant options for your review.
Great Private Mortgage Rates On Commercial Property
“Private Mortgage Rates on Commercial Property Now As Low As 7% in The GTA”
The commercial financing world has been turned upside down. Long held as the gold of traditional lenders in their portfolios, the commercial mortgage market is slowly getting taken over by private lenders.
Well, perhaps taking over is a bit strong, but definitely gaining share in this property mortgage market is not an understatement.
Traditionally, private mortgage interest rates started at 10% for the better deals with an interest term of no more than one year and a hefty private lender fee. But that has been changing as more and more investors flee the stock market and take refuge in mortgage financing for the security it offers and the predictability of return.
In strong market regions like the Greater Toronto Area, privates have gone so far as to offer interest rates as low as 7% with interest terms of two to three years in a lot of cases.
This is largely driven by the higher quality of available deals as institutional lenders continue to take a cautious approach to issuing commercial property mortgages. And with the best available institutional rates in the 5.5% to 6.5% range, private mortgages are right there with respect to being competitive.
While most privates do not offer an amortized payment, the interest only payment is kind to the cash flow and allows business owners somewhere to park their financing during the current economic storm in the capital markets.
Private lenders tend to be very regional and there are many areas that don’t have a lot of private mortgages available, especially not at 7%. But for those who happen to be in the highly sought after market areas, the private loan rates are definitely something to consider.
This includes commercial property financing for both commercial and industrial properties. Lending requirements can still be similar to the banks in terms of what a private lender wants to see from the borrowers, but the decisions tend to be made much quicker which can make all the difference when you’re trying to close a transaction that’s on the clock.
While private mortgages are rarely a long term solution, right now they may be the best solution available to you for a commercial property purchase or refinancing situation. Definitely something to consider if you are looking for commercial property mortgage financing.
Quick Mortgages Are Private Mortages
“When You Need a Fast Closing, an Interim Mortgage, Or a Bridge Loan on a Property Deal, The Best Form of Quick Mortgage is a Private Mortgage”
There are times when you need a mortgage quick.
It may be interim financing or maybe a bridge loan. It can happen when you are short on time and cash. A family member may be in a bind and asks for an unexpected favor, or maybe other options have been exhausted.
Maybe you have bought an investment property, such as a condominium, and your financial situation has changed.
This occurs often; the closing of a new condominium can take three to four years time from the offer to construction, registration and closing. During that time your financial situation could be completely changed. Employment situation, more debt or maybe a divorce or separation could have occurred.
Regardless, you are legally obligated to close the transaction. On the positive side, the condominium has increased in value. You may want to quickly resell the condominium once you close it.
Unlike the usual mortgage application which require a lot documents that need to be authenticated and which take time to be processed, private mortgages can be can be approved and closed in a few days.
So what are some other advantages of a bridge or private mortgage?
You can be provided with an open mortgage. This way you have more options available to you once you close. A quick sale can happen and the mortgage can be paid off without a penalty. (keep in mind the rate will be higher than bank rates, but since the mortgage is usually for a short period, the costs still make sense).
Another advantage is the possibility of 90% or 100% financing. Private mortgages are usually approved with a ‘make sense’ approach. A lender may lend you a full purchase price of $200,000 on a condominium that has increased in value to $300,000.
There is the advantage of a quick answer is quite valuable at times. Sometimes you can call us in the morning and have a commitment in your hands by the afternoon.
We’ve done deals where a conventional lender has pulled the commitment on the day of closing.
An instance of this was a purchaser that elected to close in a corporation. The bank would not fund because of that and quick bridge financing needed to be arranged. We approved the deal on the same day and closed it a few days later.
Private Mortgage Lenders More Like Banks
“While There Is More Private Mortgage Money Available These Days, Its Not Necessarily Easy To Secure”
Private mortgage lending has moved out of the closet and more into the forefront these days as we enter the current era of asset based lending brought on by the recession.
Gone are the days when most private lenders would just look at the available equity in a property and make a lending decision based on their comfort level in taking over the property in the future in the event of default. While these types of private lenders still exist, the larger majority are evolving into quasi institutional lenders that still offer higher rates that traditional lenders, but not before a higher level of due diligence is completed.
The private mortgage money lending world is growing as stock market investors seek more secure investing opportunities and banks remain largely on the sidelines for less than stellar property financing opportunities.
The private mortgage loan is typically a form of short term bridge financing, and in the current economy there is an excess of these short term deals to go around even though there’s more private money available than ever before.
Here are some of the key drivers for the increasing number of private mortgage applications:
- Traditional lenders are not providing mortgages for anything less than an “A” deal. Many of the mortgage requests that would have historically been done by a bank or institutional mortgage lender are ending up on the desks of private lenders. There is competition among privates for these higher quality deals which have resulted in lower interest rates for the better deals.
- Business owners are not meeting their covenants or are in arrears and the bank is calling the loan. In the current market, its not uncommon for an institutional lender to act quickly on delinquent accounts even if the business can clearly demonstrate that better days are ahead. Private lenders step in to provide short term bridge financing until the business’s financing profile improves enough to return to a traditional lending facility.
- Institutional Lenders Are Taking Their Time With Deal Assessment. The recession has caused traditional lenders to be more cautious when making financing decisions, asking for more and more information before a deal can be funded. The longer lead times put deals at risk and they end up being done with a private lenders in order to get closed in the time required.
And while private mortgage lenders are clearly open to all these types of deals, they are also getting more selective and doing more checking on each deal to make sure they’re not putting their money into a potential headache.
The new breed of private lender would rather not have to take the property back in default, and are very focused on the borrower’s exit strategy for repaying the private mortgage at the end of its term.
Click Here To Speak To Mortgage Broker Joe Walsh About Private Mortgage Financing.
Private Mortage Lending Continues To Evolve
“A Private Mortgage Loan Can Actually Be Your Preferred Mortgage Option In Many Situations”
You may not even realize this, but private mortgage lending is actually a growth market for lenders looking for a more secure investment than the stock market and its unpredictable ups and downs.
And while there are certain applications for private money where the interest rates can be quite high, there are also many scenarios where the interest costs of a private mortgage are only slightly higher than a conventional bank mortgage.
The term hard money is basically applied to private funding and typically refers to very high interest rate private mortgages. But high interest rates always relate to high risk and if someone chose to accept a high interest rate private mortgage it was likely because their wasn’t anything else available for the property in question.
With more and more private money coming into the market, many privates are also organized around mortgage corps and act and appear more like banks.
Over time, privates have also split off into two groups. There are the more traditional private lenders that will lend on real estate that they are prepared to own in the event of default and will take on borrowers with more risky financial and credit profiles. They are prepared to deal with a default and are very focused on the future market value of the land.
The second group, while also prepared to liquidate land in order to reclaim their funds in the event of default, are more interested in the borrower’s potential exit strategies and look more to mortgage requests where there is a higher probability that the borrower will be able to sell or refinance by the end of the mortgage term.
For this second group of private mortgage lenders, because the quality of the overall deal in terms of lender financial and credit profile are stronger, their rates also tend to be lower.
As an example, its definitely not unheard of to see a commercial bank lending rate for a property be only 2% lower than a private loan rate.
Many privates are now offering longer mortgage terms as well. While, for the most part, private mortgages are for one year terms, there are cases where lenders are prepared to invest in a property longer term and are content with getting an annual interest rate. Some of the longer term private mortgages even offer mortgage amortization and principal repayment.
As traditional lenders continue to tighten up their lending policies during the current recession, private mortgages become more of an option that can also be cash flow affordable as they tend to only require interest only payments.
Click Here To Speak With Mortgage Broker Joe Walsh For Any Questions About
Private Mortgage Loans.