INFO ABOUT PRIVATE MORTGAGE LENDERS

Posted by: dan

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Written By Tony Dhami
www.topnegotiator.ca
www.hamiltonmortgagebrokers.ca

Private mortgage lenders are likened to angel investors by some. They are similar because they usually provide short-term loans for asset-backed investments, e.g., land, property.

As the hard asset is the collateral, private mortgage lenders don´t lend based on a borrower´s credit. There are many different types of private mortgage lenders. However, following are some things they all generally have in common&58;

Commonality #1. Private Mortgage Lenders: Canada - Loan is granted based on the equity in the property (e.g., a building, land).

Commonality #2. Private Mortgage Lenders: Canada - Loan is usually for a short period of time (6 months to one year), as compared to a traditional mortgage span of 15, 25 or 30 years. For this reason, and a few others, loans given by private mortgage lenders are typically referred to as hard money loans.

Real estate investors tend to take out hard money loans because they are quicker to get and don´t require a lot of documentation like traditional mortgage loans. This allows them to "hop on a good deal" when they see one without wading through a bank loan process.

Commonality #3. Private Mortgage Lenders: Canada - Interest rate is usually higher than a traditional mortgage. Loans given by private mortgage lenders are typically referred to as hard money loans.