Financial institutions that offer private mortgage loans are in business with people who have no access to or do not qualify for regular financing options. They provide short-term loans backed by assets for a property purchase. A lot of businesses and individuals in the country take out North East mortgage loans because they are their best option given their specific situation.
Taking out a mortgage loan from a private lender may be a suitable option if you want to purchase an untraditional property that traditional lenders cannot finance or if you need a short-term loan that you can pay off within a few years. Private mortgage loans are ideal for those who need quick financing without waiting for a lengthy approval process, those who have a poor credit rating and those with an unverifiable income.
Private Mortgage Lenders: Who are They?
These lenders can be organisations or individuals who want to invest their money for short terms to earn profits from mortgage loans. Private mortgage lenders lend money to qualified borrowers who want to buy property, which will serve as collateral. A lot of these lenders choose to invest in a specific region close to their operations or residence.
A private mortgage lender will try to evaluate every case as a possible investment opportunity and not just look at your credit history and rating. Some private mortgage lenders meet the borrowers face to face to see if they suit their investment. Often, they charge higher interest rates than traditional lenders; however, the process of taking out a mortgage loan from these lenders is easier and faster.
How Private Mortgage Terms are Different from Traditional Mortgage Terms
In general, private mortgages are provided for shorter periods than traditional mortgages. Common terms range from six months to three years. Also, interest rates for private mortgages are higher than the rates for traditional mortgages. Often, the processing of the loan and the release of funds takes about 2-3 weeks. But approvals can usually come in two days from the date of application.
If you are planning to take out a private mortgage loan, you should consider getting advice from mortgage experts. An experienced mortgage broker, for instance, can help you find a reputable private mortgage lender and facilitate the agreements as legally binding contracts. Through the help of these experts, you avoid the hassle and worry involved in finding and picking the right private mortgage lender for you.