Private Lending in Strathcona

Private Lending in Strathcona

If you feel like you're jumping over obstacles to get approved for a mortgage in Strathcona, you may still have options.

With the help of a licensed Strathcona mortgage broker (such as myself!), your chances of being approved for an ethical mortgage can be raised through avenues such as private lending!

Now that's something to cheers about!

Reasons Private Lending May Be An Attractive Mortgage Solution in Strathcona

Big banks (A-lenders) and even alternative lenders (B-lenders, monoline lenders etc.) often have higher mortgage qualification requirements and strict protocols regarding who they lend to.

Certain regulations are in place to protect not only the lender and economy, but yourself as a borrower as well! What's the point in purchasing a property if you'll just be at risk for not making payments, and having it foreclosed on?

Private lenders in Strathcona have more flexibility to assess a borrower's file on a case-by-case basis, and have more over all freedom to decide who they want to lend to.

Because private lenders in Strathcona carry a higher risk of lending than traditional lenders, they often provide their lending services with the trade off of higher interest rates; this helps balance their heightened risk of lending.

Common Reasons To Use A Private Lender In Strathcona

Many borrowers turn to private lending when the big banks have said no.

Common Qualification Factors Which Cause Mortgage Applications To Be Denied Are:

Having a low credit score or 'red flags' such as bankruptcy on a credit report
If this sounds like you, it doesn't mean a mortgage is out of the question. Depending on other personal factors, a private lender may be able to ask questions to determine whether you'd currently make a reliable borrower. (Note: checkout 'credit 101' for tips regarding your credit)

Being self-employed/a small business owner
Self-employed borrowers have a unique way of declaring income which may make their file appear higher-risk to some traditional lenders; working alongside a licensed Strathcona mortgage broker (such as myself!) will open you up to special lending programs aimed specifically at helping self-employed borrowers (even if your self-employment history isn't 2 years long)

Have a large down payment with challenging debt ratios As a licensed Strathcona mortgage broker, I'd be happy to learn about your unique borrowing situation to determine whether fitting you with a private lender would be a solid solution for getting your foot in the door to world of real estate

So what can you do if A-lenders and B-lenders have said no, but you’re sure you can afford a home in Strathcona?

Consider private lending!

The Basics Of Private Lending

Private lenders can be a welcomed borrowering opportunity in Strathcona when other traditional lending avenues are exhausted.

Private lenders mainly follow their own set of rules for lending; unlike A-lenders or alternative B-lenders (which are tied to banks and must follow strict federal regulations), private lenders offer more flexible lending solutions (sometimes by not having a minimum credit score requirement, income requirement etc.)

You must be wondering why every borrower wouldn't just apply for a mortgage in Strathcona through a private lender...

...Higher rates!

Private lenders leverage their higher risk of lending with higher rates.

What does this mean for you as a borrower? Let's find out!

Considerations Of Private Lending in Strathcona

Private lending has its trade-offs. While it can provide an opportunity to some borrowers, it has some aspects to consider.

Considerations of private lending for a mortgage:

• If you're delinquent on payments to a private lender, they may have a lower tolerance and act quicker to foreclose on your Strathcona property if you default on your mortgage
• Interest rates through private lenders often hover between 6%-18%, depending on the mortgage and risk of lending
• Private lending agreements are often on significantly shorter terms (3 months, 1 year etc.)
• Private lending in Strathcona often involves higher fees
• Private lending is often not regulated federally which is why contacting a licensed Strathcona mortgage broker (that's me!) is highly recommended; as an expert in the mortgage industry, I'm aware of private lenders who are ethical, trustworthy, and have a good reputation.

Now that we understand some of the considerations involved with private lending in Strathcona, let's take a peek at some of the benefits.

 

Benefits Of Private Lending in Strathcona

There are perks to using a private lender for a mortgage.

Some of the benefits of securing a mortgage through a private lender are often:

• Low barriers to mortgage approval, easier to qualify for a mortgage
• A quicker mortgage approval process in Strathcona
• Usually no 'stress test' involved
• Opportunity to create additional funding for renovation projects with a bridge loan
• Some private lenders will finance properties which require maintenance/renovations

 

Private Lending In Strathcona Takeaway

Overall, private lending can be a valuable alternative for borrowers who are facing challenges with getting approved by A-lenders or alternative B-lenders.

Private lending is often a great stepping-stone until you can find yourself in a financial position to be approved by traditional lenders, but it all depends on your unique borrowing situation. The goal of private lending is to begin your homeownership journey, and move up the ladder to alternative lending or an A-lender as soon as possible.

Chatting with a licensed Strathcona mortgage broker about your options is a recommended avenue to determine whether private lending may be right for you.

Private Lending With The Assistance Of A Trusted Licensed Mortgage Broker

To discuss whether private lending may be an optimal mortgage solution for your best interests in Strathcona, let's chat!

I’m Kyle Benzies (licensed Strathcona mortgage broker); it would be my pleasure to confidentially learn about your lifestyle and goals to match YOU with the perfect mortgage solution. With the right resources, your chances of getting approved for a mortgage are greatly increased.

Give me a call to explore your mortgage options in Strathcona and to discuss the world of private lending!

***other conditions may apply to anything listed above. The information provided on this page should NOT be implicitly relied upon, and may not be 100% up to date. It's best to contact us for the most current conditions/program offerings for private lending***