Benefits of Private Mortgage Lending
Raise your hand if....
You’re someone that commonly associates private mortgage lending with higher fees, higher interest rates, and higher risk?
It’s ok, you aren’t alone.
And while some of these points can be true– in some cases, private mortgage lending can actually be the best option! Let me explain why.
In this post, I’ll be detailing the benefits of using private mortgage lending options as a buyer in Ottawa.
First let’s start by defining what a private mortgage is:
A private mortgage is a loan given by an individual lender, rather than a traditional financial institution (such as your bank). These individual lenders or smaller companies provide loans based on their own capital that they have to lend.
One of the biggest benefits to using a private mortgage lender in Ottawa is your ability to qualify. Private mortgage lending options in Ottawa are easier to qualify for because private lenders are willing to be more flexible in their loan terms with you. If you have less than perfect credit or need flexibility on employment requirements, private mortgage lending could be a great option for you.
Need to borrow a larger amount than your traditional lender will approve you for? Want to access the equity in your home but don’t qualify? Traditional mortgage lenders in Ottawa typically have a maximum loan amount which can place limits on borrowers. Private lending on the other hand can be more customized to your needs and requirements.
Quick closing is another great benefit to private mortgage lending. Sometimes traditional mortgage financing can take up to weeks or months to close. In a hot or competitive real estate market, this option can really give you a one-up on the competition and allow you to borrow money quickly.
Looking to purchase a unique property or something that requires some renovation in Ottawa or the surrounding area? A traditional lender (such as your bank), likes a simple and straight forward transaction that doesn’t require any major repairs. This means that if you have the dream of owning rural properties, recreational properties and “handyman specials” in Ottawa– Private mortgage lending is your best (and maybe your only) solution.
Consolidate outstanding debt. You aren’t alone. Today’s average Canadian has over $21,000 of individual, consumer debt. This number has increased 8.2% compared to 2021. But what if I told you that you could consolidate all of your debt into 1 easy payment at a more affordable interest rate than your credit card companies could ever offer. Seems like a no-brainer right? Private mortgage lending paired with an exit strategy can give you your freedom back, and I’d love to make that happen for you.
CRA Debt: Did you know? Debt accrued and owed to the CRA (Canada Revenue Agency), can only be paid using a private mortgage lender. Most other traditional lenders and financial institutions will not loan you money to pay off CRA debt!
As always– it’s best to discuss your options with a professional mortgage broker who has the expertise to help you navigate these complex situations. Fees and interest rates are always a really small piece of the entire big picture. And while private mortgage lending in Ottawa tends to be the last resort for many, the benefits of using it can be huge to your overall bottom line!