Are you considering a private lender for your new mortgage?
What is a private lender?
A private lender is a person or business that loans money to someone but is not connected to a financial institution such as a bank, credit union or financing company. Private lenders can be a relative, a friend or colleague, or someone you do not even know, as well as an investment corporation.
Why would you choose to use a private lender?
Private lending is becoming more popular lately due to the high demands on our real estate and finance markets. Due to the new mortgage approval requirements, it may be more difficult for home buyers to secure financing with a traditional lender or bank.
Did you know that having a private lender could affect your ability to obtain property insurance?
Some property insurance providers are unable to provide a policy for homes with a private mortgage. If the mortgage is registered with a lawyer on the property there may be some companies that can accommodate this, however you should speak with your Rhodes & Williams insurance broker to confirm ahead of time.
Prepare yourself to answer some additional questions regarding your financing such as the amount of the mortgage, the term of the mortgage, and the reason why the financing was not placed with a standard or traditional bank or financial institution.
Our brokers do have the ability to check coverage availability with our various insurance providers if your current insurance company is unable to provide coverage due to the private lender. This may take some extra time, so please keep this in mind.
If you have questions, please contact us and we can direct you on the specifics that would apply to your individual situation.
Mandy Ledain, RIB, CAIB