A mortgage, or home equity loan, is a loan for a particular amount of money which is secured by your house. In the loan, you are required to repay the loan with equal monthly payments over a set term. While there are various kinds of mortgages, one specific type happens to be a private mortgage.
What is a private mortgage?
A private mortgage is when an individual lends his or her own capital to investors or real estate funders while securing a mortgage against the equity. Essentially, private mortgages and money lending is an alternative to usual lending institutions, like great banks.
The concept of a private money loan is relatively simple, three elements are required for a loan of this nature to transpire: a client is also known as a borrower, a lender, and a lot of paperwork. If for nothing else, private money loans can provide for borrowers and investors in need. While they seem to serve the same purpose as normal lending institutions, there are several differences.
So, it is important to ensure the lender you choose is worth all of these spendings and commitments.
About the Mortgage.
Private mortgage lenders in BC are the easiest form of lender to apply for. With the equity of your home being the most important factor in approving an application, we will get you accepted in as little as 24 hours.
If you’re interested in finding out what sort of loan you can apply for, please get in contact with us today.
Private lenders in BC will lend up to 75 per cent and, in some cases, 85 per cent of home value in major cities. The loan-to-value ratio would be lower in smaller populations, typically between 50% and 65%.
Would you like to hear the best part? Unlike traditional loans, the credit score or income situation of the borrower does not matter when determining the amount of the loan. The procedure for applying for a private mortgage is easy and similar to that of a normal mortgage. There are several different people or companies you can approach for a mortgage, usually, the lender is a businessman or private loan company.
These people can be intimidating, so it is important to have all your required information and documents while also having a clear idea of the type of loan you want.
The first step is to know your credit score. In order to access your credit score, you need to pull your credit report and order your credit score. Your credit report is basically an analysis of your past and present loans, these can be student loans, home equity loans, mortgages, auto loans, etc.
A credit report also contains data of all of you open credit lines such as credit cards, and bank accounts.
Other requirements of a private mortgage.
While the amount you can borrow is mostly limited to eighty-five per cent of your home equity’s appraised value, the actual amount of your loan can also be negotiated and changed based on various factors. Lenders also tend to ask for a twenty per cent downpayment. Before settling on a lender you should compare terms and talk with banks, credit unions, mortgage brokers, and mortgage companies.
It is very important to have a good cash flow and the amount of money available. If a lender becomes sceptical and thinks you do not have enough funds to repay the loan then they will likely reject your application. Furthermore, you should also stick to your current employment while applying for a loan.
This means ensuring you do good in your current position so that there is no risk of getting fired. If a lender presumes you are likely to lose your job, they will not be interested in having a mortgage.
Lenders tend to analyse your debt to income ratio before accepting your application for a loan. This helps them see whether or not you can make the monthly payments required. If a lender notices you have other loans, debts, or several due bills they will be unlikely to approve your mortgage. It’s very simple if you can’t pay for your other loans and debts, who’s to say you can pay for this new mortgage?