Considering A Private Mortgage? Let’s Discuss Your Options
Private mortgages are ideal short-term secured loans lasting as little as 3 to 24 months per term (each deal varies from case to case). This mortgage is suited for individuals who almost qualify at a traditional lending institution but might need some more time to build up their credit, save for a larger down payment or grow their income or net-worth.
Traditional lending institutions are stringently red taped and focus heavily on income and credit score. Private/Alternative lenders’ on the other hand, focuses primarily on equity and is more flexible in the way borrowers qualify.
When do I consider a private mortgage?
- You only need a short-term loan
- You are buying a non-traditional property that a conventional bank or lending institution won’t give you a mortgage for.
- You have an untraditional way of declaring your income, or you are self-employed and the bank in not considering all of your income.
- You have poor or bad credit and the banks or conventional lending institution won’t approve you.
- You need money quickly and are not able to go through a long approval process and risk not being approved.
Rates and payments
Interest rates vary from case to case and considers the risk of the overall transaction. A private lender usually charges higher interest rates than conventional mortgage lenders. So borrowers have a number of options to help the monthly payments stay low and affordable:
- You can choose to make monthly interest-only payments
- You can choose to defer your monthly payments until the end of the term of the loan, ask your CTMS agent for an accrued interest private mortgage
- You can choose to per-pay your monthly interest payments when the loan is funded and that amount is deducted from the total amount of the loan.