What You Need to Know About Private Mortgage Lenders?

Private mortgage lenders are a great alternative, reliable source willing to lend money to everyone. Traditional lenders more often than not have to stick to strict lending guidelines, which makes it hard to lend to individuals with unique loan needs. Unlike traditional lenders, private lenders work closely with their borrowers to make sure that all their unique needs are met and taken care of. Whatever your financial situation looks like, a private lender will more than likely be willing to give you a chance, no matter what type of mortgage you need. Considering a private lender is one of the best decisions you can make for yourself and your financial future.

Who are Private Mortgage Lenders?

Private mortgage lenders are individuals or entities that help homebuyers finance their dream homes. They have emerged in recent times creating a haven for individuals who are unable to get a mortgage approved from traditional lenders because of their strict guidelines. This is where a private lender steps in and helps a buyer from banks and other traditional institutions. Instead of looking at your financial health, private lenders will take into consideration the value of your property, your income, the property’s condition and location, and the size of your down payment.

Are there any limits from a Private Mortgage Lender?

When it comes to lending a loan amount to you, private lenders will consider your current mortgage position. If this is your primary loan, you may be eligible to secure 80% of the current value of your home. If you are looking to refinance your mortgage, private lenders will typically lend up to 65% of your home’s value. Unlike traditional mortgages, a mortgage from a private lender tends to be short-term, as these funds typically provide individuals with quick access to funds, or to establish credit. These funds usually come with a higher interest rate as compared to other mortgages.

Who should consider using a Private Mortgage Lender?

They typically appeal to:

• Individuals who have a poor credit score
• Individuals who require more flexible payment options
• Individuals looking for a short-term loan
• Self-employed individuals
• Individuals who require quick financing, and don’t want to risk being rejected by a traditional institution.
• Individuals who want a short-term solution, so that they can save up on their down-payment or improve their credit score.

Why choose a Private Mortgage Lender?

•  Private lenders usually often have online applications that don’t scrutinize your financial situation but focus more on the   funds you require.
•  Private lenders offer individuals a personalized service, unlike traditional lenders.
•  They will provide you with the best options to suit your needs and interests.
•  One of the biggest advantages of private mortgage lenders is that you have the freedom of choice to choose who you want   to work with. Often people who choose to go with a traditional lender simply have to work with the only bank that will   approve their mortgage.

Payment Structure:

With private mortgage lenders, you will be only required to make the interest payments and will not be required to repay the principal. This reduces the stress on your monthly financial obligations when compared to a traditional mortgage. You have the option to pay a monthly interest sum, or an up-front payment covering all of the interest fees until the end of the term. The repayment structure allows you to choose an option that best suits your needs depending on your financial situation.

Types of Private Lenders:

• Individual Private Lenders: They can be friends, family, co-workers, or any individual willing to help you finance your home.
• Syndicate Investors: These are investors who pool their personal funds to finance one mortgage.
• Mortgage Investment Corporations (MIC): Like syndicate investors, MIC’s pool their funds to invest in multiple mortgages. They will be able to connect with a wide range of private lenders that best suit your financial needs. They provide a more personalized solution when compared to a traditional mortgage lender.

When looking to see how a private mortgage lender can help, contact the team at GNE Mortgages to find out more information about our mortgage lending services.