If you have a purchase agreement ready and are struggling to decide between a private mortgage lender or one of the big banks, don’t worry. You’re not alone! It’s important to bear in mind that not all lenders are created equal. Working with private mortgage lenders, in particular, can make the whole process more streamlined and efficient – especially if you’re consulting through a broker such as yours truly to nab the best possible rates.
Go ahead and save your energy for more important matters in your everyday life! Since private mortgage lenders, generally, are not traditional institutions such as banks and the like, prequalification for a mortgage tends to be less frustrating. Of course, there are still guidelines that need to be adhered to, but it’s generally less of a challenge to get preapproved through them.
While they must ensure what you’re applying for is financially feasible for you – helping you and themselves out at the same time – the laundry list of requirements tends to be more straightforward and shorter. For example, they might factor elements like a property’s value into the preapproval process along with your income, assets, and otherwise. However, bear in mind that interest rates will be higher by comparison.
Traditional lenders can be a great pick for many folks – I’ve worked with loads of them over the years and have carefully fostered connections with some incredible folks who work at these fine institutions. However, let’s be realistic – they’re not for everyone, and that’s okay! For example, if you know you can afford a specific mortgage for a hot property and want to snap it up before someone else does, you risk missing out by having to wait.
Bear this in mind, as extra time is something you’ll need to accommodate for due to traditional lender mortgage underwriting procedures. There’s a lot of background checking, consulting, and due diligence on their end that needs to be taken care of. With a private mortgage lender, they’re governed by fewer of these compliances, so you can generally not only get approved but much more quickly.
All in all, there’s less paperwork, fewer calls, and nowhere near as much time pressure to deal with if you need that loan ASAP. In fact, I’ve even seen private lenders approve a mortgage and get everything set up in a single day! And, if you need a lien, you can count on them for one, ensuring a foreclosure is an option still available to you.
Debt’s no fun, and life sometimes throws curveballs one’s way. This can make it harder to bounce back financially yet, still, sometimes the need arises for a new home, which obviously will add pressure to your budget. While traditional lenders may not be so forthcoming if you have a bad credit score or iffy financial status, private lenders are typically more lenient and forgiving – again, this is primarily due to being governed by fewer rules and regulations that they would otherwise abide by. The process of getting approved, even with such circumstances in play, is usually quite a bit easier.
That said, if you have hardly any income and a bunch of racked-up debts, realistically, owning a home isn’t something I or any lender would recommend. Wait until it’s at least moderately safe – in every sense of the word – to do so, and you’ll enjoy the experience without any unnecessary stress!
Want to get to know some excellent private mortgage lenders in your area? Get in touch with me today and let’s chat about your home-owning plans. With my mind and your mission to secure the best solutions possible, we’ll find a great option for you in no time.
Andrew Thake is a seasoned mortgage broker with over 15 years of industry experience. He’s assisted more than 2,200 clients in finding their ideal mortgage solutions. Recognized for his excellence, Andrew has received high honours and awards, including the National Rookie of the Year from TD Canada Trust and recognition as a Top 10 Ottawa Mortgage Broker in 2023. He has also been inducted into the Hall of Fame at Dominion Lending Centres and has consistently received their Platinum Award during his tenure as a mortgage broker.
Andrew’s dedication lies in serving his clients and prioritizing their needs with an empathetic approach. Throughout the application process, he provides tailored, informed, and efficient services to ensure the best mortgage solutions for his client’s unique circumstances. The best part of Andrew’s job is when he gets to see the joy on his clients’ faces following their mortgage approval.