At Spark Financial Group we offer Private Lending in various categories.
Private mortgages are short- term, interest-only loans, ranging in length from 1 to 3 years. Interest only loans do not require homeowners to pay the mortgage principal down, and instead only require interest payments each month.
Private lenders have realized that conservative lending guidelines used by banks and conventional lenders exclude many individuals who are in fact able to pay back loans. Most importantly, private lenders take into account a property’s overall value and marketability as opposed to simply the borrower’s credit history.
Why would I use a private mortgage lender?
You would use a private mortgage under any of the following circumstances:
What mortgage rates and fees should I expect on a private loan?
Mortgage interest rates can range from 9-12% depending on the property, borrower and current economic conditions. Since they are almost always higher than rates offered by conventional mortgage lenders, you would only turn to a private lender when turned down by banks and bad credit lenders.
Fees associated with a private mortgage loan
With a primary or conventional lender, the broker is paid a commission directly from the lender. When using a private lender, you (the borrower) pay the broker’s fee directly. Private loans also incur set-up fees bringing total fees paid between 1-4% of the loan amount.
The good news is, these fees can be financed through the mortgage loan. Let’s say you need to borrow $100,000, and can therefore expect fees of $3,000 ($100,000 * 3%). In order to cover these fees, you would apply for a loan of $103,000 to cover the extra costs.
Types of Private Mortgages
At Spark Financial Group we offer Private Lending in various categories. Some examples include:
What criteria we look at?
More so than primary or conventional lenders, private lenders have tighter guidelines on other factors to compensate for the added risk.
- 119 Westcreek Drive, Suite 3 Vaughan ON L4L 9N6
- (437) 688-9159