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private-mortgagesCRE Magazine did a short overview on private mortgages. Among its notable points:

  • Private lenders look primarily at the quality of the property itself, your equity in it, and your apparent ability to repay to loan.
  • Your credit score is less important.
  • Location matters. “In inner-city Calgary, a property would turn over very rapidly, so we would be willing to go to 85% (LTV), whereas in small-town Alberta, we would look at what’s in that town and we might only go to 65%.” – Chuck McKitrick, CEO of private lending firm Alta West Mortgage
  • With private mortgages, CRE says: “you’ll pay higher interest rates and possibly broker/lender fees, and the term of your private mortgage won’t exceed a year.” (Note: sometimes privates will go longer, but you may not want to, given their interest rate.)
  • There’s a story to every borrower who uses private lending says MortgageLand’s David O’Gorman. “If there wasn’t a story, they’d be going into an institution to get their money.”
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