Nevertheless, a multitude of applicants fails to meet the requirements of local banks and credit unions, which deprives them of the opportunity to qualify for a mortgage.
Instead of feeling disheartened, individuals with low credit scores are encouraged to apply for a private mortgage loan offered by private lenders. These moneylenders are more flexible and risk-tolerant, enabling individuals with unfavorable credit scores to invest in a new home.
Take a look at the main benefits of collaborating with such professionals.
Not all individuals are considered eligible for a traditional mortgage lent by banks or credit unions. These moneylenders oblige loan applicants to provide piles of paperwork in order to assess their financial history and check whether they meet the imposed criteria. Consequently, applicants with a low credit score are considered ineligible after a thorough inspection of their credit reports throughout the years.
Moreover, a myriad of self-employed individuals face difficulties in qualifying for a traditional loan, as their work history is not steady enough in the eyes of lenders. Similarly, most young adults are also incapable of getting a mortgage from banks and credit unions due to their short credit history. Click here to check out the factors that affect preapproval mortgages.
Private lenders, on the other hand, don’t rely on credit scores and reports to determine the eligibility of loan applicants. These moneylenders are much more flexible in terms of mortgage criteria, making them more willing to take risks. Therefore, private mortgage loans are believed to be the best alternative for people with poor credit scores, whose applications have been turned down by banks multiple times.
Another benefit of applying for a private mortgage loan is going through a fast application process. Unlike banks and other financial institutions, private lenders don’t take weeks to decide whether applicants are eligible for a private mortgage. These professionals don’t have to abide by corporate policies when reviewing applications, which enables them to make quick decisions.
As a result, individuals who are interested in getting a loan as soon as possible don’t have to miss on property buying opportunities. In the real estate market, taking immediate action is crucial for purchasing a property at favorable prices, as the real estate market is likely to change in the blink of an eye. Keep in mind that the loan application procedure of private moneylenders involves less red tape, thus accelerating the process of approval.
A wide range of loan options
The largest part of banks and credit unions in BC provides a limited number of financing options to homebuyers. Nevertheless, the most prominent private lenders in BC offer an extensive choice of loan options to borrowers. These professionals strive to choose the most favorable mortgage for each applicant, depending on one’s property requirements and financial situation.
In addition, private lenders tend to specialize in a particular lending field in order to meet the requirements of various applicants. For instance, some moneylenders specialize in approving mortgages for residential properties, whereas others focus on issuing credits for commercial properties. Naturally, you are advised to find a money lender that specializes in residential mortgages.
Furthermore, certain moneylenders only collaborate with individuals looking for refinancing. These professionals provide financing options for the purpose of debt consolidation or the renovation of properties. Consequently, opting for such a moneylender would be the best option for people looking to sell their existing property and purchase a new one.
Higher tolerance to risk
Perhaps one of the greatest benefits of choosing a private lender in BC is the higher risk tolerance when compared to banks and credit unions. Private money lenders aren’t obliged to abide by strict financial laws, thus being more tolerant to risk. Instead of using a myriad of eligibility criteria, these professionals look at a couple of factors when reviewing applicants.
For instance, the most important factor these lenders take into account is the value of mortgaged properties. It’s paramount for the property to show no signs of damage in the course of the appraisal process.
In order for these moneylenders to take no notice of your poor credit score, the estate has to be in good condition. Go to the following link, https://www.investopedia.com/articles/pf/12/home-appraisals.asp, to learn everything you need to know about home appraisals.
Another factor essential to private lenders in BC is the income of applicants, which can be either confirmable or non-confirmable. The former is considered more favorable for moneylenders, whereas the latter requires them to estimate the average income of applicants in their respective field of work. Such estimates have to be done in the case of self-employed candidates.
Moreover, the amount of down payment is also important to moneylenders. Although the minimum down payment should be fifteen percent of the overall mortgage amount, applicants are always encouraged to make a higher deposit. The larger the deposit, the lower the risk for private lenders to approve one’s mortgage loan.
Ultimately, in the event of refinancing, the maximum equity stake allowed by moneylenders is 85% LTV (loan-to-value). Bear in mind that each lender imposes its own regulations when it comes to equity, which means LTV varies across different moneylenders.
Excellent customer service
Another reason why residents of British Columbia are recommended to apply for a private mortgage loan is getting remarkable customer service.
When applying for a bank loan, you join the sea of loan applicants. Consequently, you can’t expect banks to provide personalized attention to each candidate.
In contrast, private lenders treat applicants with respect and take a genuine interest in their property requirements. You can hope for close collaboration during the entire process, as these professionals guide potential borrowers through every step of the way.
Don’t get discouraged when rejected by your local banks.
There are other organizations that provide funds to ineligible applicants!