PRIVATE MORTGAGE
Why and When We Need Private Mortgage?
Private Mortgage is a short-term solution for those clients who need more flexible terms and conditions to qualify for a mortgage. If a client does not qualify with traditional banks, a private mortgage is the best solution. Private mortgages an interest-only payments and high rates but they are quicker in getting approval and acceptable with less credit history or poor credit score. Private Mortgage Lenders may be willing to take on greater risks in exchange for potentially high-interest rates and extra fees.
MORE FACTS –
It’s important for borrowers and lenders to check and understand the terms and conditions of private mortgages. Private mortgage can be taken as a short-term solution, it is the duty of a Mortgage Agent/Broker to prepare an exit strategy and help users out for traditional Banks/Lenders. You can go through a Landing Page to get a better insight into Private MortgagesPrivate Landing Page.
If you have irregular and non-traditional sources of income like being self-employed or having an income from an investment. Then a private Mortgage is the best solution for you. Get more flexible but customized terms, these are tailored to meet your specific needs. You can calculate your mortgage using the Mortgage calculator tool available and always check if you can qualify with the income and terms. You can access the calculator through the Mortgage Calculator.
WHY CHOOSE ME?
Specialized in private mortgages. As a level -2 full-time mortgage agent, we have access to private and mic lenders, which can provide the best interest rates. I worked with many clients for private deals. We will understand your unique situation and provide you with a relevant solution. If you have any questions regarding private mortgages, you are a click away from getting the best mortgage solutions. We can help you get the quickest approval. We have 80 + Lenders, we can do up to 85% LTV.
Case Study: Private Mortgage in Ontario, Canada
Certainly, let’s consider a hypothetical case study of a private mortgage in Ontario, Canada. Please note that this is a fictional scenario, and details may not represent real individuals or situations.
Background: Harry and Catherine are a married couple residing in Toronto, Ontario. They are looking to purchase a new home but have encountered challenges securing a traditional mortgage due to Harry’s past credit issues with their credit history. After being declined by several banks, they decided to explore alternative financing options and came across a private mortgage lender.
Key Players:
- Borrowers: Harry and Catherine
- Private Mortgage Lender: XYZ Private Mortgages Inc.
- Real Estate Agent: Agent H
- Real Estate Lawyer: Agent Y
Scenario:
Challenges with Credit: Harry had issues with his credit history has history, including a previous bankruptcy and late payments, making it difficult for them to qualify for a conventional mortgage.
Searching property: With the help of real estate agent H, Harry and Catherine found a suitable property that covers most of the features they require in a home. The property is listed at a price of $600,000.
Private Mortgage Terms: XYZ Private Mortgages Inc. agrees to provide a private mortgage to Harry and Catherine. The terms include:
- Loan Amount: $450,000 (75% of the property value)
- Interest Rate: 8% per annum
- Loan Term: 2 years
- Monthly Payments: Interest-only payments for the first year, followed by principal and interest payments for the second year.
Down Payment and Legal Process:
- Harry and Catherine contribute a down payment of $150,000 from their savings.
- Real estate lawyer Agent Y handles the legal aspects of the private mortgage, including drafting the mortgage agreement, conducting a title search, and registering the mortgage on the property.
Closing the Deal:
- The private mortgage lender disburses the $450,000 loan amount to Harry and Catherine at the closing of the deal.
- The total purchase price of the property is covered by the private mortgage and the down payment.
Monthly Payments:
- Harry and Catherine make interest-only payments for the first year, amounting to $3,000 per month.
- In the second year, they make monthly payments of both principal and interest based on the agreed schedule.
Exit Strategy:
- During the two-year term, Harry and Catherine worked on improving their creditworthiness.
- They plan to refinance with a traditional lender at the end of the term, using the increased equity in the property and improved credit to secure a better mortgage rate.
Conclusion: The private mortgage allows Harry and Catherine to overcome their credit challenges and fulfill their dream of homeownership. It provides a short-term solution while they work towards improving their financial situation and transitioning to a conventional mortgage in the future.