Is there any difference whether you get a mortgage from a private lender or a bank? I hear conflicting things about both and I am not really sure what’s the difference. If banks turn you down, which private lender can someone turn to?
I think there is a difference. I think banks are going to be a lot stricter than a private lender. I also feel that many people who are turned down by a bank will probably be approved by a lender.
Most people are probably comfortable approaching their own bank for a mortgage. After all, they probably have been dealing with that bank for years.
They may have services that they use and have built up a history with the bank. If they can’t get a loan, they probably turn to the private lenders.
With a private lender, qualifying for a loan takes less time and the process is also not as complicated as that of a bank. Things are not as rigid, as with banks.
I think the difference is in how serious banks take certain guidelines. For example, you had better have very good credit or you can forget it.
Also, your salary will play a big part. If you are making a good and steady salary, especially for years, then a bank will look favourably upon this.
Banks are regulated. On the other hand, private lenders are not regulated. They can be a little more lenient. This doesn’t mean that anything is illegal, of course.
Banks want to make profits. They know how to do this and they are good at it. Equity is the main thing that private lenders look at.
The mortgage term length is another difference. Mortgage rates are low with banks, so taking a long-term mortgage would be the thing to do.
I think it’s better to keep the solutions of private lenders on a short term. But don’t discount private lenders. Just because a bank turns you down, don’t give up your dream.
Not everyone is approved by banks because of their strict guidelines. Find out more about what a private lender can do for you. Just make sure you find out more, for a better understanding.
You don’t always have to depend on the bank. You can call Canadian Mortgage Services for help and advice.
If you are looking for a private lender, you should use the services of a broker. A mortgage broker can help you find decent rates from many of these private lenders. You do not have to give up a dream home. There are ways to still do it.
One good thing about private lenders is that it allows you to build good credit. If you don’t have good credit, you have a chance to rebuild it. As a borrower, you and the private lender can discuss and agree upon the terms that satisfies everyone. If you have made many payments, you could even get a lower mortgage rate.
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