De Krupe Law
Private Mortgage
Private Mortgage Lawyer
Buying a home is one of the biggest investments that one makes in their lifetime. The majority of people require a mortgage to purchase a property. The traditional mortgage process can be time-consuming and stressful, particularly if you have poor credit or insufficient income. In such cases, a private mortgage may be a viable alternative. However, the process of securing a private mortgage is complicated, and that’s where De Krupe Law real estate lawyers can help.
What Is Private Mortgage?
A private mortgage is a loan secured from an individual or a group of people rather than a traditional lending institution such as a bank or credit union. Private mortgages are most commonly used when individuals can’t qualify for traditional bank loans. These loans can be used for any purpose, from buying a home or commercial property to renovating an existing property.
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Types of Private Mortgage Lenders
There are 3 main types of private mortgage lenders:
- Individual Lenders – Private individuals who lend their money to borrowers and earn interest on the loan;
- Syndicate Investors – A group of investors that pool their money to provide larger sums of capital to borrowers;
- Mortgage Investment Corporation (MIC) – A company that pools money from investors and lends it to borrowers. The interest paid on the loan is distributed among the investors. The investment to few distinct home loans at the same time can only be made if the intended borrower meets certain standards for approval.
Private mortgages are an alternative option for individuals who can’t qualify for traditional bank loans. However, the private mortgage process is complicated, and it’s crucial to have an experienced real estate lawyer on your side. At De Krupe Law, we can help you navigate the private mortgage legalities to ensure you have the best expert representation.
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There are various reasons why you may need a private mortgage lender. For instance, you may have a poor credit score or a high debt-to-income ratio, making it challenging to qualify for a traditional mortgage. Other reasons are:
- You need money immediately;
- Short-term loan is the only option that suits your needs;
- A bank isn’t approving parts of your income (e.g you are self-employed or have an unconventional method of declaring your yearly pay and income).
Private mortgages are also useful when purchasing unique or unconventional properties that do not meet the criteria of traditional lenders.
Special Terms and Conditions of a Private Mortgage
Private mortgages have special terms and conditions that differ from traditional mortgages. For example, individual lenders are allowed to charge higher interest rates and fees than traditional lenders. However, these loans have a shorter term and require a more substantial down payment. When you are ready to sign a mortgage contract with a lender, it is important to contact a private mortgage lawyer who can carefully review it to verify the contract is legal and there are no potential risks.
What Do You Need to Be Able to Qualify for A Private Mortgage?
Qualifying for a private mortgage loan in Ontario can be a simpler and faster financing option than going through a bank or other traditional lenders. Additionally, in Ontario, the monthly payment for a private mortgage is typically lower than that of a conventional mortgage, as the payment is based solely on interest, and no principal payment is required.
This is because private mortgage lenders, unlike many traditional lenders, do not take into account a borrower’s credit history, current debt situation, payment delinquencies, or income. Instead, they base their lending decisions primarily, if not exclusively, on the property’s equity and marketability.
Private mortgage lenders are typically more flexible than traditional lenders, allowing borrowers to negotiate loan terms and conditions that meet their individual needs. Moreover, private lenders are often able to approve and fund loans much more quickly than traditional lenders, making them an attractive option for borrowers who need immediate financing.
The Role of a Real Estate Lawyer in Private Mortgage Qualifying
A real estate lawyer plays a vital role in the private mortgage qualifying process. They will conduct a title search to ensure that the property is free of any liens or encumbrances. The lawyer will also review the terms and conditions of the loan and advise the borrower on their rights and obligations. Additionally, they will prepare and register the mortgage documents, ensuring that the transaction is legally binding.
At De Krupe Law, our experienced private mortgage lawyers can help guide you through the private mortgage lending process, ensuring that you understand the terms and conditions of the loan and that your legal rights are protected. Contact us today to discuss your private mortgage financing needs.
How We Can Help
De Krupe Law is a full-service real estate law firm that provides legal services to individuals and businesses in the private mortgage market. We can assist you in finding a suitable private lender, negotiate the terms of the loan, and prepare the necessary documentation. Our experienced private mortgage lawyers will guide you through the private mortgage qualifying process, ensuring that you fully understand the terms and conditions of the loan.