Private Mortgage Lending or Financing refers to a mortgage contract in which the lender is not a financial institution, but rather an individual or a business.
Financial institutions have several strict guidelines regarding how to lend money. Usually, they follow a set of specific rules and regulations before lending an amount to the borrower. Unfortunately, these rules and qualifications, for many people are difficult to meet, due to which they are often denied of the financing they require. This is when Private Mortgage Lending comes into play.
One of the main advantages of Private Mortgage Lending is its availability. Whether you have a poor credit rating, bankruptcy, or anything which adversely affects your ability to secure and repay a mortgage from banks and other lending institutions; Private Mortgage Lending is always an option for you. However, the interest rates that come with this option are higher than conventional loans.
The good part is that the rules pertaining to how you can use the mortgage amount is less restrictive as compared to the terms & conditions of a conventional lending institution. You can use the borrowed amount for –
- Real estate purchase
- Home renovations
- Debt Consolidation
- Restructuring of Financing
- Equity take outs and a lot more
So, if you’re finding it hard to obtain a conventional loan from financial institutions, Private Mortgage Lending is definitely your best bet.