What are Private Mortgages?

A client with a low credit score or recent credit issues (e.g., bankruptcy, missed payments) may struggle to qualify for a traditional mortgage. A private mortgage can help them secure financing while they work to rebuild their credit, allowing them to purchase a home now rather than waiting for their credit to improve.

When a client is selling their home but needs to purchase a new one before the sale is finalized, they can use a private mortgage for bridge financing. This allows them to buy a new property without waiting for their current home to sell, avoiding the pressure of aligning closing dates.

Clients looking to buy properties that are considered unconventional (e.g., a rural farm, vacation property, or a home requiring significant renovation) may find that traditional lenders are unwilling to finance such properties. A private mortgage offers a more flexible solution, allowing the client to proceed with the purchase of these types of assets.

Many self-employed individuals find it difficult to meet the strict income verification requirements of traditional lenders. A private mortgage can be an attractive solution for clients with a fluctuating income or who lack the conventional documentation, enabling them to leverage their business earnings to buy property.

Some clients may seek to invest in real estate but have already maxed out their borrowing limits with traditional lenders. A private mortgage can provide a fast and flexible option for acquiring rental properties, flipping homes, or expanding their real estate portfolio.

A client with substantial debt may use a private mortgage to consolidate high-interest debts. They can refinance their home with a private lender, using the funds to pay off credit cards or other high-interest loans, lowering their overall monthly payments and simplifying their financial situation.