A private mortgage is essentially much the same as a traditional mortgage. The main difference between the two being where the money is derived from. A traditional mortgage is financed by a large company or industry, such as a bank. A private mortgage comes from smaller institutions or investors. Private lenders are inclined to take on higher-risk clients as they treat your mortgage as an investment opportunity.
Why Would I Be Approved for a Private Mortgage but Not a Traditional Mortgage?
As indicated above, private lenders see your need for a mortgage as an investment opportunity. A private lending company will finance your home ownership, then collect interest slowly. SInce a private lender’s goals differ from that of a traditional lender, it is easier for them to assume higher-risk clients. If you have been denied a traditional mortgage, contact FamilyLending.ca to find out how a private mortgage could help you achieve your homeownership goals.
Are There Advantages to Choosing a Private Mortgage over a Traditional Mortgage?
Are you eligible for a traditional mortgage, but wondering if there are more advantages to taking out a mortgage with a private lender? The answer is yes! A private lender can provide you with benefits that a traditional lender cannot. Private lenders are efficient, quick, and simple. A private mortgage can be ready to go in as little as 4 days, versus 30 days with a traditional mortgage. Additionally, private lending typically works on a reduced payment period, meaning you can pay off your mortgage faster than you would with a traditional lender; allowing you to be done and stress-free.
At What Cost Do the Advantages of a Private Mortgage Come?
As a result of the higher-risk clients that private lenders are willing to accept, the interest rates are typically higher than that of a traditional lender. Furthermore, you may incur more legal and closing fees. If you are unsure as to whether or not a private mortgage is right for you, the best option is to speak with an experienced and knowledgeable mortgage broker, contact FamilyLending.ca for assistance.