The Private Mortgage Lending Tool
“Private Mortgage Financing Is One Of The Most Versatile Mortgage Lending Vehicles Available”
One of the key benefits of a private mortgage that we don’t speak about a lot is the fact that the mortgage is provided by an individual or small group, and that, for the right price, a commitment to fund can be developed or customized to fit a whole host of situations and circumstances.
Cheaper residential mortgage money provided through bank and institutional lenders is based on mass production lending criteria for the most part, where the requirements are pretty cut and dry, especially for the “A”mortgage business. The goal is to process quickly, close quickly, and build the lending portfolio, which is profitable as a commodity in volume and relatively small margins where the risk of loss is very low.
When a borrower’s circumstances are not straightforward, it can be challenging at times to fit into the world of institutional lending due to the cookie cutter approach they take.
This is where private mortgage financing can be an incredibly valuable tool to acquire residential or commercial financing for a short period of time.
A private mortgage lender has the ability to look at the information on a whole and make their own lending decision, which at times is based on lender experience and market knowledge as much as it is specific lending criteria.
And when a deal morphs in form from the time a mortgage commitment is secured to the time it has to fund, it can be difficult to get a bank or an institutional lender to adapt their commitment or even continue on with the application. While there is no guarantee that a private mortgage lender will always be able to adapt to twists and turns a particular deal may encounter, there is a much better chance that something can be worked out, especially when the decision making is held by one individual versus a larger organization with lots of rules and requirements.
Part of the reason a private mortgage lender can be flexible is that its worth their while to do so. In most cases, any form of customized private mortgage lending solution is going to come at some type of premium. But if the added cost saves a deal or equity from being lost, then the borrower is still better off with a higher cost mortgage, especially if its the only option available in the time the applicant has to work with.
If you have a residential mortgage or commercial mortgage financing scenario that is not fitting into a conventional mortgage program, I suggest that you give me a call and lets see if we can come up with a private mortgage solution for you to consider.
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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