Are you tired of being told that you cannot borrow enough because of the stress test?
Good news is there is one guaranteed way to completely avoid the stress test! Get a mortgage with a private lender.
Private Mortgage Lending
Private Mortgage Lenders are lenders that offer short term (1 - 3 years) and interest only mortgages. You’re not required to pay down the principal amount, unlike a standard mortgage, so your payments are minimized.
What are the Lending Guidelines?
Private Mortgage Lenders put emphasis on the property as collateral. They almost always request for an appraisal and calculate the risk of default based on the financial picture of the applicant. They also often ask for an exit strategy. How is the borrower going to repay the mortgage in 1-3 years? Will the property be sold? Is the applicant expecting to receive a large sum of money? These are questions they often ask so be prepared with a repayment plan.
In addition, due to the risk, Private Mortgage Lenders typically only lend up to 65% - 75% of the property value.
How Much Higher are the Mortgage Rates?
Private Mortgage Lenders set the rate on a case by case basis based on risk. Generally,
1st mortgage rates starting at 7.49%
2nd mortgage rates starting; 7.99%
In addition to the rate, there’s also lender and broker fees totaling to 2% - 4% of the mortgage amount
Is this the Right Option for You?
Private Lenders rarely advertise and they depend on Mortgage Professionals like me for business. If you’ve tried getting a mortgage from the Big 5 banks and Alternative Mortgage Lenders, and cannot get approved, the last resort is to approach Private Lenders. The rates and fees may be high but it gets the job done. I’ve add a mortgage application funded from start to finish within 1 week!
This is an area that I specialize in as a Mortgage Broker. I hope you found this helpful. Thanks for reading!
John Lee