For many individuals who are looking for a loan to cover the purchase a home or land, there is no better option than private lender financing. While people often assume that the best choice is to go the bank and apply for a loan there, private lender financing offers a solution for those with less than perfect credit or who are looking for a certain type of loan. Determining whether this type of financing is right for you is essential to the home buying process for any buyer.
The first thing to consider is whether or not you qualify for traditional lending options. While private lending financing seems like a good idea, most people can get better rates from their financial institution. However, if you do not have the credit to qualify for a loan this way then private lender financing is the best solution. The second thing you need to consider is if you can afford the monthly payments with interest for private lander financing. Interest rates are often substantially higher with this type of lending than with traditional mortgage and loan options.
Private lender financing is best suited for anyone who does not have the credit to get a traditional loan but has the means to afford the payments and higher interest rates. For most who choose this type of financing it is simply a means to an end. Making payments on time each month will allow you to boost your credit score and be in a better place in the future to qualify for a loan with lower interest rates.
If you are working on a special type of project then private lending may be the only option available. For example, banks and other financial lenders typically will not fund efforts to purchase raw land. The primary reason behind this is because the brokers do not want to take the time and effort to survey the land themselves which typically means leaving the office and getting a little dirty. Third party private lenders embrace this challenge and are the go to source for financing.
Private lending sources are also more apt to see the bigger picture for their clients. While the bank often sees a person who wants to buy a home or other piece of property, the private lender takes the time to see the bigger picture of what you plan to do with that land to make it more valuable into the future. For example, if you were purchasing a large patch of land with the intent on turning it into a horse stable featuring lessons and outings, a private lender will see your view and the asset that you will provide to a community and therefore be more apt to loan the amount needed.
If you are unsure about whether private lending is the best option for you then you should contact a Private Capital Mortgage at 403.252.7882 and discuss your options using our services verses using those of your financial institution. A lending professional will help you navigate the waters of financing your next purchase.