Transcription of Video Blog:
Hi, everyone. It’s Rowan Smith from The Mortgage Centre. I’m here today to talk about private mortgages, private money. What is it, when do you want to use them?
Well, private mortgages are really just that. It’s a mortgage funding and financing that is set up by a private individual or a corporation. Now, these are not financial institutions. This could be somebody who is just very wealthy and is looking to lend a friend or family member money, or it could be someone who just has a bunch of funds sitting around and wants to earn a return that is greater than they can earn at the bank.
So, with a private mortgage like that, the borrower would usually have to go through the broker or they have to know the lender directly and approach them and get the mortgage set up. Now, why would you do this? You’re going to face higher rates than the bank; you’re going to face fees for sure, so why do borrowers do it?
In most cases it’s because they can’t qualify under traditional guidelines. Maybe they’re in the midst of a divorce. Maybe they’re in the middle of a career change. Maybe they’re currently unemployed and just need to use some of that equity that they’ve built up in the property, to get them through until their new job starts.
There are a lot of very legitimate reasons why people need private money, and very legitimate reasons why the banks won’t give them the loans under the circumstances. If you’re in one of these situations, private mortgages might be the way to go.
I have a lot of private lenders ranging from very wealthy people to very large mortgage investment corporations, that can look at your situation and will make more sense, than perhaps your bank who is looking to have you fit within the bank box.
So, if you know somebody who is in a tough situation and needs access to funds, I can help them.
From The Mortgage Centre, it’s Rowan Smith.