As a homeowner, you may have come across the term private mortgage, and the odds are that you wondered what sets a private mortgage apart from other mortgages. The thing is, when you get into the process, you’ll find that there are as many mortgage products you can consider as there are lenders who can provide you with one.
Generally speaking, homeowners prefer opting for a traditional mortgage. That said, many homeowners encounter instances may either be unavailable or inaccessible. In such instances, you should consider approaching a private mortgage lender to secure a mortgage loan.
Private Mortgage: What Is It?
A private mortgage is an interest-only, short-term loan that an individual, group, business, or institution that isn’t a major bank or credit union provides. In some instances, a private lender could even be someone whom you know, such as a relative or a friend. A private mortgage has a far shorter term than a traditional mortgage, typically ranging anywhere between six months and three years. As private mortgages are interest-only, you don’t need to pay the principal amount and instead only need to pay monthly interest payments.
Private mortgage lenders offer fewer restrictions and more freedom for borrowers when compared to banks and credit unions. Banks tend to be much more selective when it comes to choosing whom to provide mortgages to. Private mortgage lenders, on the other hand, put their focus on the property’s value more than the borrower’s credit history.
When You Should Consider a Private Mortgage
There are many instances to consider when you should think about approaching a private mortgage lender. Here are some of them:
- Getting rejected from a traditional lender because of bad credit
- Being self-employed without a steady income
- Needing emergency or quick funding for a relatively shorter period
- Being an immigrant without or limited credit history
- Needing a second or even third mortgage (for investment properties)
- Needing a financing option for a smaller and non-traditional dwelling that banks refuse to finance (mobile home or micro condo)
Secure Alternative Mortgage Financing with Experienced Private Mortgage Lenders in Edmonton
We are among the leading private mortgage lenders in Edmonton, Canada. If you require alternative mortgage financing options, give us a call at 1(780)756-1119 to get in touch with our experts or apply for the right mortgage here.