InTouch Mortgage Solutions

funding of mortgages and loans

Private Lending

Becoming a private lender

Any individual or group of individuals that have a large pool of savings can become private lenders. Private lenders can offer money to borrowers in the form of short-term or longer-term mortgages and loans. Issuing private mortgages and loans can generate attractive returns compared to interest earned from bank or securities. Our mortgage professionals will connect you with opportunities for private lending and will assist your through the entire process.

Borrowers: Accessing the resources you need

There are many situations that can develop when private lending makes good sense. While it may cost the borrower more to use a private lender, in many cases it provides an exit strategy or a short-term solution, enabling borrowers to improve their personal situation or bad credit and move forward. In other cases, it allows real estate investors or builders to access funds that enable them to take advantage of investment opportunities. Private lenders offer quick, easy access to money as a short-term solution for many scenarios.

When is private lending an appropriate option?

  • for individuals with bad credit history – difficulty meeting standards of traditional lenders
  • If the banks have declined your renewal and you need to bridge the gap in order to rebuild your credit
  • when you need bridge financing for a new purchase without having to break your existing mortgage
  • for real estate investors who need funding for the mandatory 20% down payment
  • to top-up a down payment when a buyer only has 15% and needs to come up with the additional 5%
  • for construction financing when you need a progress-draw mortgage for the build period
  • to pay out a spouse during a divorce
  • to pay out high-interest credit card debt, improving overall credit

Private lending is similar to 2nd or 3rd mortgages that command higher interest rates than traditional or alternative mortgage rates. While the rates are higher, the payments are interest-only for a short-term – so the payments will not reduce the principal amount borrowed.

In addition, private mortgages are not eligible for mortgage insurance, so if the borrower defaults on payments, the lender may want to sell off the property quickly. As a result, before accepting the mortgage, the lender will want to ensure that the property itself is in a desirable condition and location that would sell fairly quickly – if it becomes necessary.

Need funds to move forward?

Our network of private lenders have the money you need. Contact us today.