Unlike what you may think, traditional financial institutions are not the only way to get a mortgage loan. It is more and more difficult to borrow from them, since criteria for approval are always stricter, which is complicating the borrower’s capacity to get a mortgage financing from these banks. Fortunately, it is possible for you to turn to a private lender if other solutions are not working.
To get a mortgage loan from a bank, you need a good income, a high credit score, and an appropriate down payment. If one of these elements is missing, you can still obtain a private mortgage, since a private lender does not have to comply with the same rules as financial institutions. It is therefore possible for them to lend to borrowers more easily and more quickly, while being more flexible on reimbursement conditions.
You can also take a private mortgage loan for special situations, such as buying a house to renovate it and resale it quickly (a flip), buying a house for rental purposes, or buying an apartment building.
Private mortgage financing works similarly to a regular bank loan. Obviously, the main difference lies in the fact that instead of being a bank, the lender can be a private institution, a company, an investor, or an individual. These people or organizations choose to finance your mortgage, while knowing it represents an increased risk. Also, the interest rates are generally higher than with banks.
Furthermore, private lenders are getting guaranties on your house or concerned buildings. Thus, they have access to the same recourses as banks if you are in default of payments. For example, they can get a taking in payment or make a judicial sale. So it is important for you to fulfil the agreement just like with a regular loan, if you want to avoid a 60-day notice. In most cases, it is better to establish a notarized contract, so the lender and you can both feel confident.
If you are looking for a private mortgage lender because a bank has refused your loan request, Clic Hypothèque is there for you. We are an alternate financing society specialized in private mortgage, with simple and quick solutions.
Our team of professionals is skilled in alternate financing and will know how to guide you towards a short term and competitive interest rate mortgage solution, while respecting your current resources.