A private mortgage is a loan contracted for a short period of time, usually from 3 months to 3 years, using the subject property as a collateral. Clients who do not qualify for conventional mortgages have access to private mortgages as a short-term solution for their financing needs.
The requirements for mortgages from banks are very stringent when it comes to income and credit history, which makes private mortgages the best alternative to clients who do not qualify under these rules.
Private lenders, in addition to the Exit Strategy clients will opt for to transition from a private mortgage to an A or B lender, are very concerned with the equity built in the subject property as well as its general condition and sometimes its location. Private mortgages can be secured against a Loan To Value (LTV) of up to 80% of the subject property value.
