Why should you Invest in a Private Mortgage?

House key in home insurance broker agent’s hand protection or in salesman person giving to buyer customer. If you’re buying a home, entering the world of mortgages can be overwhelming and confusing. There are so many options when it comes to financing the purchase of your home you may not even be aware of all of them. Recently there has been in a rise in private mortgages as a means of purchasing a home. If you have questions about how to get a private mortgage in Mississauga, here’s what you need to know.

What is a private mortgage?

A private mortgage is a short-term interest-only mortgage loan from a lender who loans out private funds. This kind of mortgage requires the person borrowing the money to only pay the interest on the outstanding mortgage loan every month. By doing so, a private mortgage can help you reduce your monthly payment amount and give you more cash flow every month if the monthly payments are within your financial means.

What does a private mortgage do for you?

Typically, a private mortgage in Mississauga has a term of anywhere from a few short months, to one three years. While you only pay the interest on these kinds of loans, you won’t make any progress on paying down the principal. A private mortgage can be obtained fairly easily for purchasing, refinancing or get access to cash fast. This can prove very helpful if you are in an emergency situation, where you may need cash. This can also be helpful if you are looking to improve your credit score and then move to a prime lender once the private mortgage term is up.

Who should get a private mortgage?

A private mortgage is typically best suited for people who may not have the best credit history, or who are having troubles securing a mortgage with traditional lenders. Or for anyone who needs quick financing where the banks or traditional lenders are not able provide you a mortgage approval.

How does a private mortgage impact your credit score?

Since many people with a poor credit history don’t qualify for a traditional mortgage, a private mortgage gives the borrower an opportunity to show that they can make the payments they are required to.

When they start making payments and build up this history it can really help their credit score. When that happens – once the term of the mortgage is up – the borrower may have the necessary credit to get a mortgage with a traditional lender with a lower interest rate.

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