Private Mortgage Financing Offers And Timing
“Private Mortgage Considerations When It Comes To Accepting Offers For Financing”
One of the key things to keep in mind when working with offerings for private mortgage financing, especially when requesting amounts over a million dollars, is that any offer for financing is going to have a very short life.
In the private mortgage lending world, most private lenders are individual investors that put all or some of their investment portfolio into private mortgages.
When they have money that becomes available to them, they want to place it into the market as quickly as possible, otherwise their cash funds are not earning any type of appreciable return.
So when they have money to invest in private mortgages, they are actively looking at deals and placing the ones they like as quickly as possible.
The result of all this is that private lenders are continually “in” and “out” of the market, depending on if they have any cash available to invest at any given point in time.
Compare this to a bank or institutional lender who in theory at least never runs out of money, the dynamics around making an offer and keeping it available for you to accept are somewhat different.
For instance, even in the situation of the bank or institutional lender, all offers for financing will have an expiry date, but if you came back to the lender well after the expiry of the offer and wanted to get a new offer to allow you to move forward with the deal, chances are there would be no issue with this happening, provided that the fundamentals of the deal and your ability to qualify financially were the same.
This may not be the case with a private mortgage lender in that if you let an offer lapse and then go back to the lender weeks or months later, there is no guarantee that they will have any funds available to you despite that they had previously approved your request for financing.
This is less likely to happen with smaller amounts of financing, but as the amount requested increases, it becomes more of a risk.
And while there are always other options to turn to in the market place if a particular lender can no longer fund your deal, you may not necessarily end up with the same or as good an offer and could find yourself either scrambling for another option or settling for inferior rates and terms if pressed for time.
The key point to remember when dealing with a private lender is that when you get an offer you are prepared to accept, act on it fast or it may not be available to you for very long.
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