5 Reasons Why a Private Mortgage Can Be Better Than a Bank Loan
If you are planning to buy a home, you have two options. You can get the funds from the bank or a private lender. For the longest time, borrowers have been opting for banks. But this doesn’t mean that getting your mortgage from a private lender isn’t ideal. Surprisingly, getting your mortgage from private lenders in Vancouver comes with incredible benefits that you may not enjoy with the banks.
In this article, we explore 5 reasons to get your mortgage from a private lender. Let’s delve into them.
1. It Is Easy To Qualify
For many people, qualifying for a traditional bank mortgage is quite difficult because not all of us are blessed with a high credit score. It takes time to build that high credit score. Unfortunately, banks tend to focus more on the borrowers’ credit scores. So if you have a poor credit score or lack proof of stable income, banks are more likely to reject your application. This isn’t the case with private lenders or alternative mortgage lenders. They don’t focus much on these issues. They will offer you the funds you need as long as you have enough equity in your property.
2. Short Approval Process
Banks generally follow a stringent and arduous filling process for mortgage loan borrowers. Not only is this time-consuming, but also very stressful. On the other hand, private mortgage lenders don’t follow strict regulations and don’t have to deal with the red tape. This basically means that it’s faster to get a mortgage from a private lender than a traditional mortgage loan.
3. Larger Down Payment
Usually, a traditional mortgage requires borrowers to put down quite a significant percent of the home’s purchase price. You can also look for some money elsewhere to adequately finance the loan. But this isn’t the case with private lenders. Most private lenders require a 20% down payment to approve your loan.
4. Less Red Tape
Time is always an important aspect when buying a house. There might be a great opportunity that demands you to move as fast as possible. But this may be quite difficult to achieve with a traditional bank mortgage that typically takes time to be approved. Thankfully, private lenders don’t have to look at so many things as banks, meaning you will be able to get the loan as fast as possible and purchase a home of your choice right away.
5. Perfect For Beginners
A mortgage loan from a private lender is a perfect starting point for loan beginners. Of course, we all start from somewhere, and these private lenders’ mortgage loans will allow you to start your life and make these important purchases and investments because they don’t focus too much on your income. Here is how you can get a mortgage with a low income in Canada. If you are new to real estate, you may not understand some things such as empty home tax declaration. So you need to get conversant with them.
As you can see, getting your mortgage from a private lender is a good move because of the numerous benefits that come with it. Just make sure that you do your research about your preferred lender before you go ahead and apply for the mortgage.