Private mortgage loans are loans available from private lenders. They are set at high-interest rates but can be availed even if you have a bad credit score. These private lenders would evaluate the property that you want to pledge against a loan to calculate your eligibility.
When should you consider a private mortgage?
A private mortgage is often the most expensive options available in the market and should be considered as the last resort. You may consider available options for a private mortgage in Windsor if you want a loan against a property which is not conventional and private banker may not consider it to provide you the loan.
Private mortgages are often considered as fast financing options when you don’t want to wait for long approval process involved with the banks and financial institutions.
It may be your best option when you have a bad credit score which prevents you from qualifying for a loan from banks or you has an income source which is not confirmed and cannot be evaluated by private banks to calculate your strength to return the loan.
Different Fees and Interest Rates Involved
Private mortgages in Windsor Ontario may be available for you at an interest rate of 10 to 18%. They may apply a loan processing fee of 1 to 3%, and the loan may be available for the term varying from one year to 35 years.
For example, you took a loan of $400,000 at eight percent interest rate for two years. Then under interest only loan, you would have to pay a monthly interest of $2667 every month for next two year. The original amount of $400,000 is still unpaid at the end of two years while you have paid an interest of $64,000 on the amount.
Similarly, you can evaluate the fee to be paid for processing your loan. For example, you want to apply for a loan of $100,000 which may carry processing fees of $3000 at 3% rate.
Time Frame Involved in Accessing Private Mortgages
Private mortgage lenders may evaluate your eligibility to pay back the loans and provide you with loan amount in a short time of one week.
They evaluate your pay back power to provide you with the loans rather than going in for your credit score calculation or type of income source.
Kind of Private Mortgage Lenders
Private mortgage lenders often specialize in a certain area to provide loans. The private lender may only focus on the property and its value to provide you with the loan. This kind of private mortgage lenders considers only private and commercial properties to be pledged as security against the loan.
The lender may specialize by the reason why you are seeking a loan, like some private lenders would only provide loans to people looking for re-financing options to buy another property.
There is a leader who would focus only on urban areas like Windsor Ontario. They would consider only properties located in Windsor to provide you with a loan for they are aware and comfortable with the area.