Not everyone has the necessary requirements imposed by lending institutions like banks to apply for a traditional mortgage. For this reason, private mortgages are available to those that need a different route to access a loan in order to purchase a home.
A private mortgage is for borrowers who aren’t considered low-risk clients, the ideal candidates that traditional lending institutions want to lend to. It operates in the exact same way that a traditional mortgage does and the main difference is that the financing comes from a private investor as opposed to a traditional big name institution.
If you’re wondering whether a private mortgage is more suitable for you, Dhugga Mortgages can help by outlining some of the reasons why you may consider this mortgage option:
- If you have bad credit, the chances are that most traditional lending institutions will not offer you a loan because you are considered a high-risk client and do not fall into their mould of an ideal customer. If this is the case and you do have poor credit, private mortgages will consider offering you a loan and are more willing to work with you.
- If you require a loan immediately, traditional lenders normally have a waiting period of around 30 days, whereas a private lender can have the loan ready in as little as four days in some cases. If for whatever reason you cannot wait, a private mortgage may be a better option.
- If you’re expecting an increase in your finances in the near future but need a loan now, a private lender will be more willing to accept you as a client. For example, if you want to close on a new property immediately but are still waiting for your current home to sell, a private mortgage lender will help you close the deal and can offer you a great short term loan.
- If you do not have enough for a down payment, a CMHC fee is required by a traditional lender. If you would like to avoid this fee, a private lending company often has the ability to remove this fee because they understand that not everyone has a down payment ready to go.
- Maintaining a property and home is a lot of work and requires renovations throughout the years. Renovation projects require down payments and a lot of the companies will not start the work without some payment up front. A private lender can offer you a second mortgage which can provide you with the cash flow necessary to complete the upgrades and renovations that are both necessary and desired.
If any of the reasons mentioned here apply to you then a private mortgage could be the option best for you. Dhugga Mortgages can help answer all of your mortgage questions and assist you with your home purchasing needs. If you are in the Brampton area, they are the go-to brokers who deal with all aspects of mortgages including refinancing so don’t wait any longer and give them a call today!