Do you live in Canada and has it ever happened to you before that you dream up an amazing business opportunity only to be met with crushing disappointment as you are rejected by bank after bank?
Maybe your credit score has taken a slight ding in the past or the idea is just considered too radical or risky by traditional financing institutions.
Whatever the reason may be, you might not be ready to give up on your dream just yet! However, you need the upfront investment to make it happen. Lucky for you, there is still an avenue open to you in Canada: Private mortgage lenders.
What is a private mortgage lender?
A private mortgage lender is an individual, group of people or business that do not form part of traditional financing institutions, such as banks, and wish to invest their on-hand money in short-term loans to make a profit. These loans are made on property like residential or commercial properties.
As private lenders, they have their own requirements toward both the borrower and the investment. A private lender tends to put more importance on the investment opportunity itself than the borrower’s credit history.
This makes them more open to a whole diaspora of new borrowers and investments that would get rejected out of hand by banks or other financial institutions. Although they also usually only invest in a certain area local to their own.
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How to find a good private mortgage lender for you
Private mortgage lenders are inherently slightly more riskier than traditional lenders or banks so you are well within your right to ask how you separate the good from the bad. Here are a few things you should keep in mind when looking for the best private mortgage lender for you:
1. Previous customers: A reputable private mortgage broker won’t mind displaying previous customer feedback. You can also search for customer opinions on forums, etc.
2. Brokers: Brokers are industry-insiders that often know of and have access to private mortgage brokers that aren’t as easy to find and who they only reveal to customers with specific needs.
3. Location: Most private mortgage lenders only operate in certain areas close to their own. Make sure that the private mortgage lender is based near the property in question or that they work in that area before wasting everyone’s time.
4. Industry: Many private mortgage lenders prefer to work within a certain industry. You might still be able to finance through them but you would probably have a better chance and better rates at one within your field.
5. Private mortgage lending sites: There are many sites online that collate private mortgage lenders and allow you to easily find many in one place, such as Private Money Lending Guide.
Private mortgage lenders in Canada
Here are some reputable and established private mortgage lenders you can use to get you started. As you can see from the list above, private mortgages lenders aren’t always a one-glove-fits-all solution, so you should always look around with your unique situation in mind.
- Canadian Mortgages Inc: They service Manitoba, Ontario, British Columbia, and Alberta. Their market focus is one residential property such as single or multi-family homes.
- Alta West Capital: The service Alberta, British Columbia, and Ontario and their market focus is on owner-occupied residential and investment properties.
- Caplink: They operate in Saskatchewan, Alberta, and British Columbia and their market focus is on almost any type of property investment.
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