How To Fund a Private Mortgage
Kelowna, Okanagan, BC
Private mortgages are best used as short-term solutions, ideally one to three years, helping borrowers achieve goals, improve credit and handle emergency lending situations.
Common Private Mortgage Situations
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Inadequate credit to qualify for A-rate lending
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Unverifiable or unsteady income
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Business for self
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Non-resident applications
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Emergency funding to handle foreclosure or property/income arrears
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For mobile homes or micro-condos not financed/refinanced through traditional sources
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Second mortgages/investment properties
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Short-term Construction Financing
10 Considerations for your Private mortgage application
1) Where is the property?
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Which province?, city?, neighbourhood?, rural or urban?
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Location is paramount as the lender relies more on property value than income or credit strength
2) What Type of Property Is It?
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Owner occupied or rental?
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Agricultural, farm or hobby farm?
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Mixed use? Recreational?
3) What Type of Transaction Is This?
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Purchase?
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Equity Take Out?
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Refinance / Transfer?
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Construction?
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Development?
4) What Is The Use Of Funds?
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Purchase other property?
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Cover business expenses?
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Debt Consolidation?
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Renovation?
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Is There Enough Equity to Cover the Costs?
5) How Was The Value Determined?
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Appraisal (By whom and when was it done?)
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Realtor’s estimate?
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Owner’s estimate?
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Tax assessment?
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Wild guess?
6) What Is The Loan Amount and Loan To Value?
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Is this reasonable for the location?
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Does it include fees and costs?
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Is the loan amount too small?
7) What Is The Borrower’s Financial Strength?
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Ability to pay?
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Additional assets or properties?
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Credit score?
8) Are there any twists to the deal?
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What got the client into the situation?
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Foreclosure?
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Lost job / injury?
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Marital breakdown?
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Business expenses?
9) How Will The Loan Be Repaid and When? Exit Strategy?
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Will the borrower sell / refinance / find cash from others?
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Is there a solution?
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Will this be a long term loan?
10) Intangibles
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What will prevent a recurrence of their financial situation?
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New job?
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Inheritance?
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Insurance settlement?
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New spouse?
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Additional collateral?
These are your considerations when looking to obtain and have a private mortgage approved. Huber Mortgage works with reputable private mortgage lenders.
To learn more about Private Mortgages, check out this article from The Balance.
To learn more about the Okanagan 2020 Economic Forecast, CLICK HERE.