What is a private lender mortgage?
Private mortgages are loans made between private individuals to finance a new, refinance an old mortgage. The lender, who is usually a friend, relative, colleague, or investment firm, will lend the money to the borrower just like a bank would, securing themselves with a mortgage note or similar contract registered on title.
Are private lenders better than banks?
While each provides money, a smart real estate investor should know the differences between the two. Banks are less expensive, but they are harder to work with and more difficult to get a loan approved. Private lenders main focus is the property, the value of the property and the extra cushion as equity, but they are also more expensive.
Is it Easier to quality?
One of the major perks of private lending is that it’s much easier to qualify. This is because the lender can qualify you on any basis they want. And if you have a good mortgage broker, they know which private lenders to put you in touch with based on your circumstances. (This further streamlines the process.)
Do private lenders check credit?
Most hard money lenders perform credit checks when they receive a loan application. Most established hard money lenders check credit because they need the assurance that the borrower has the ability to pay back the loan.
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