Private mortgage is the loan provided by private organizations and institutions. Private lending companies offer loans to home buyers to buy a specific asset. Home buyers can find these lenders by seeking the help of their financial agents or brokers.  But not every home buyer will be successful in getting loan from a private lender. Here are some major pros and cons of private mortgage loans.

Private mortgage is a feasible option for people who are not able to qualify for conventional mortgage because of less than exact credit, debt or self employed persons who can’t always provide the proof their stable monthly income. Private loans cannot be paid over the course of many years.  Most of the private lenders expect you to pay the loan with few months. Lenders are often looking for a very quick return for their money, and they generally are not set up to offer a loan for several years the way a typical mortgage company is. Homes that need extra renovations cannot qualify for conventional mortgage no matter how good the credit score is. In that situation, private mortgage emerges as a very convenient option. Private mortgage lender offers you the loan to get the house in sell-able condition and then flip the house.

However, one of the major drawbacks of private mortgage is interest rate. The interest rate of private mortgage is much higher than conventional mortgage as much as double than the traditional mortgage interest rate. Private mortgage lenders are not associated with credit score of the borrower. Because private mortgage is secured by property in question, therefore, credit score of the borrower does not really matter to the private lender.

If you buy a house that qualifies for private mortgage rather than conventional mortgage, the approval procedure often takes just a couple of weeks instead of 30-45 days as in case of conventional mortgage. Generally, private money lenders don’t need a long drawn-out loan process like a conventional mortgage does.

If you own a house and you want to renovate it so that its worth can be increased in a short time that would allow you to pay off a personal loan and replace it with a conventional sale, then private mortgage is the most suitable option.

As a private lender, Avon Financial is a well known company in Canada. It offers the best and flexible loan option for every debtor. Grab the opportunity and fulfill your all requirement with Avon Financial.

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