Many Canadians have turned to private lenders for mortgage financing in recent times. With the country's traditional lenders making mortgage regulations strict, many individuals who dream of owning their homes are denied the opportunity. Unlike banks, private mortgages follow a set of rules and guidelines that are similar to banks but are far more lenient.
Below-mentioned is reasons why borrowers should choose a private mortgage:
The application process is streamlined, and it is easier to qualify:
Qualifying for a private mortgage is far less stressful and easier than a bank. Traditional lenders follow stringent guidelines that disqualify many applicants, especially those who are considered low-risk. On the other hand, private lenders focus on ensuring they find every aspiring homeowner the right mortgage. They do not focus on the borrower's credit history but mainly on the individual's property value when approving a loan. They also consider the borrower's assets and income, including determining if they will be able to make the monthly payments.
Quick financing and less red tape
The underwriting process for a mortgage from a bank is time-consuming and tiring. At times, the borrower might be asked to produce further documentation, and the bank needs to do a background check, credit check, take a look at the proof of income of the borrower, etc. On the other hand, private lenders bypass most of the red tape. They try to match borrowers with the right loan in the quickest time possible. They do not require most documents as a bank would; they only need necessary relevant information to influence their lending decision. In some instances, the mortgage can be approved on the same day.
Fantastic interest rates and flexible solutions
Private mortgage lenders are able to offer flexible financing solutions at the best rates possible due to their relaxed regulations. They can even provide custom financing solutions to their customers to meet their requirements. Unlike banks where the interest on mortgages is usually fixed, a private lender offers a range of interest rates based on the property type. They are also able to meet the demands for shorter loan periods.
If you have a poor credit score
Borrowers who have a poor credit score to qualify for a mortgage are prime candidates for a private mortgage. These loans allow borrowers to save for a more significant down-payment or build on their assets, even net worth. However, it is imperative to keep in mind; it is not valid for borrowers who have a repeated history of constantly not paying their debt or bad credit.
For self-employed borrowers
For self-employed borrowers who do not have a verifiable source of income, a private mortgage is perfect for them, as their loan request would be denied by a traditional lender; because they do not have a verifiable source of income, even if their credit history is good, but they cannot verify their income source, their loan application will still be denied. In this scenario, a private mortgage would provide these borrowers with a personalized financing solution to meet the requirements of self-employed individuals.
If you are looking to apply for a private mortgage or more information, please do not hesitate to contact the team at Harpreet Puri Mortgage today.