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:
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.
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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