Private Mortgage Contingency Plan
“Do You Have A Private Mortgage Contingency In Case
Plan “A” Doesn’t Work Out?”
A Private mortgage contingency plan can be relevant to all sorts of applications related to real estate financing.
The point though is to have a contingency plan in place in case that something goes awry with your primary financing strategy.
So what could go wrong with a standard residential or commercial property application?
All sorts of things.
And the more people involved (lawyers, appraisers, accountants, consultants, etc.) the more chance their will be a timing delay, a miscommunication, and request for more information, and so on.
Unfortunately, most people don’t think along these lines, and perhaps most of the time they don’t need to. But at the first sign of trouble, getting plan “B” into place can be a whole lot cheaper than the alternative.
The goal of any of my clients is to get the cheapest form of money possible and I always strive to get them what their looking for if at all possible. But the reality of the world of finance, especially when you are talking about non standard mortgage transactions, is that something goes wrong more often than you may expect.
And private mortgage financing is a great source for a contingency plan, based on the speed that deals can be put into place.
Unfortunately, many individuals that can qualify for an “A” mortgage facility will not even consider this as private money is viewed to be too expensive, or only applicable to the desperate.
But when you’re running out of time trying to close a deal that requires mortgage financing, the cost of a private mortgage can be a pittance compared to the cost of breaking a contract, or losing out on a great property purchase.
And a private mortgage only temporarily replaces the lower cost form of money you’re after as by definition it is only a bridge loan anyway. But by getting on in place in time to complete your business you have also effectively bought time to get something better in place to pay it out.
The key to a private mortgage contingency plan is not waiting too long to put one together.
As a general rule, you should allow two full weeks to get a private mortgage in place, although it can be possible to get this done faster.
If you find yourself a couple of months into a commercial mortgage financing process, for example, and are running out of time for some reason, then the private mortgage route may be the best short term option available to you.
To find out more about your private mortgage financing options on a given transaction, give me a call so we can quickly go over your requirements together and discuss private mortgage solutions that can be implemented right away.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel