Private Mortgage Supply
“Private Mortgage Supply Can Quickly Come And Go For Any Given Deal”
I have written previously about not only how quickly a private mortgage can be approved and funded, but also how quickly the commitment put forward and disappear.
Let me explain with the assistance of a real life example.
The other day we took on a new private lender who has money they wish to place in the Ontario market at this time.
The individual is a seasoned private lender with a very clear idea of what they’re looking for in terms of providing private mortgages.
And right now, they have $3,000,000 to invest in mortgages.
Many times private lenders will get a lump of cash from the payout of a mortgage, or their primary source of revenue produced additional revenues that now need to be investment.
In any case, the good private lenders approach is always the same…they want to get their money out in the market as quickly as possible because its not making much for them sitting in their bank account.
So for a period of time, a lender with money will intake deals and put out term sheets and commitments to fund.
If a borrower does not act on an issued commitment quickly, the private lender will move on to the next opportunity and place their money.
Supply Availability Can Be An Issue
With Private Mortgage Financing
For every private lender out there, there will be times when they have money available and times when they don’t.
And for the larger market as a whole, this is not a big problem as lending opportunities gravitate to those that have money available at a given point in time.
If there is a surplus of available cash among lenders in a certain geography, the cost of funds can do down and the reverse can hold when the money supply gets tight.
But where private mortgage money supply can become a major issue is when you have very specific financing requirements that the average private lender is not prepared to meet.
In these cases, when you get a commitment provided to you that is within your acceptable range, you’d be well advised to take it and take it quickly as the private lender is not likely to wait for you.
If you come back to them at a later date, they may not have any money to put out at that time. And you might have a hard time finding a suitable and acceptable alternative.
This is also a good reason to work with a private mortgage broker that has access to lots of private lenders as there will always be individual lenders that are in and out of the market at any given time.
So if you’re going to utilize the expertise of a broker, you want to make sure he’s going to be able to direct you to lenders that have money to lend when you need it.
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