Private Mortgages for people in Port Perry, Uxbridge, Oshawa, Whitby, Beaverton and the Durham Region.
Most people in the Port Perry and Durham Region are not familiar with the concept of private mortgages. There is nothing really complicated about Private Mortgages, only that they are unfamiliar to some people. Private Mortgages fill the gaps that the institutional Lenders, such as the banks, are unable or unwilling to fill. Private Mortgages offer an alternative choice to borrowers and are a higher return investment opportunity for investors.
Private lenders have realized that conservative lending guidelines used by banks and conventional lenders exclude many individuals who are in fact able to pay back loans. Most importantly, private lenders take into account a property’s overall value and marketability as opposed to simply the borrower’s credit history.
What are Private Mortgages and how do they work?
Private Mortgages are funds that come from Private individuals who lend out for investment purposes. Typically many of these funds still come through the same traditional Banking Institutions, who help their clients connect their self-directed (R.R.S.P.) funds to Borrowers.
Who are the Lenders?
In most cases Private Lenders are retired individuals who are looking for a better rate of return than is available to them at a Bank. They are willing to fund mortgages as they can usually generate a greater return for their investment dollar.
Why Use Private Funds?
The traditional Institutional lenders are usually conservative by nature and like to deal with mortgage transactions that meet their normal lending criteria. As Institutional Banks become bigger and interest rates become lower, the requirements for “perfect” deals increases and deals that do not fit their criteria are either cut back or are declined. Private Mortgages have filled the gap left when the small Trust Companies left the Canadian scene in the nineties.
Real Estate Investors seek Private Mortgages for many reasons. Usually, for reasons of a “unique deal”, credit issues, self-employment or when a borrower cannot qualify under the large number of requirements that the conventional lending sources need to be satisfied before they are able to lend.