
Private Lenders: An Option for Borrowers with Bad Credit
Private Lenders: An Option for Borrowers with Bad Credit https://guardianfinancing.ca/wp-content/uploads/2018/09/Bad-Credit-1024x480.jpg 1024 480 Guardian Financing Guardian Financing https://guardianfinancing.ca/wp-content/uploads/2018/09/Bad-Credit-1024x480.jpgThe process of getting a mortgage loan is never easy. Matters become more complicated if you are looking for financing, yet your credit is in tatters. The traditional lending institutions usually have very strict regulations, including monitoring your credit score.
If you don’t have a decent credit score, then they may not be interested in your application. But all is not lost for those who need a mortgage and have bad credit. There is a special group of mortgage lenders for bad credit, who will consider extending to you their credit facilities even if you have bad credit.
You may not have heard very nice things about the private lending industry, and some of the things you may have heard may discourage you from considering them as a financier when you have bad credit. However, if you are willing to keep your end of the bargain, then private lenders are very ideal when you have bad credit. It goes without saying that the rates for private mortgages are slightly higher, and this is justified by the risks involved with lending to someone with a poor credit score.
For private lenders, they are primarily interested in equity as their main security and how the borrower intends to make the repayment. Since private mortgages do come with very high interest rates, they are suitable for short term solutions.
Ideally, the borrower should have plans to make the repayment in one or two years, since after that, the rates may become unnecessarily expensive and may turn into a further financial burden to the lender. In most cases, those who go for private lenders with bad credit usually plan to repay the loan through the sale of their home or by refinancing the mortgage using an institutional lender.
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