Private mortgage lenders in Calgary help fill the gap when you can’t meet traditional loan requirements.
However, if you’re thinking of getting a loan from a private lender in Calgary, there are essential questions you should ask yourself, such as:
- Who is a private lender?
- How do private lenders work?
- Why should you consider this type of lending?
This article will answer all the questions and guide you on choosing the best private lenders in Calgary.
Who are Private Mortgage Lenders?
Private lenders are lending institutions that lend money to individuals or businesses that may not qualify for traditional loans.
What sets private lenders apart from other lending institutions is that many times they will not require any collateral to secure the loan.
This makes it an ideal option for people with poor credit scores to get loans approved with speed.
However, private lenders have high interest rates than traditional lenders. This is the case because they have no protection against loans that may not be repaid.
How Do Private Mortgage Lenders Work?
The path to getting a private mortgage is straightforward. The process is not different from the process of obtaining a loan from a bank.
Once you’ve applied to the private mortgage lender of your choice, they will assess your eligibility for a private mortgage.
There are many factors private lenders consider when making this assessment. The size of your down payment is one factor. Another factor is the amount of debt you currently carry.
After the assessment, the private mortgage lender will look for a mortgage solution that meets your needs.
Your lender will then structure the deal, establishing an exit strategy, so you know how long the private mortgage will last.
However, it is essential to know that private lenders usually lend base on location.
This is so because defaults on private mortgages result in the lender taking over the property.
For this reason, the location of the property is so important when it comes to whether you will qualify for a private mortgage.
Also, you should note that private mortgages generally come with a broker and legal fees.
Why Would I Use a Private Mortgage Lender?
A private mortgage lender is suitable when:
- The property you want to buy is unconventional
- A short-term loan is all you need.
- Conventional lenders are rejecting you because of your poor credit history.
- It is difficult for you to obtain a traditional mortgage because of your nonconfirmed income.
- You don’t want to wait for lengthy approval processes.
What is the Difference Between Private Lenders and Bank Lending?
Whether you’re a first-time home buyer or looking to refinance and need a loan, there are two major options for obtaining loans: private and bank lending. But what’s the difference?
These terms may seem the same, but there are differences between them, including their interest rates, application processes, eligibility criteria, and conditions.
It’s time to take a deep dive into the differences between private and bank lending so you can figure out which option is best for you.
Higher interest rates
Easy approval process
Regulations are looser
More customized loans
Lower interest rates
A more scrutinized approval process, including a credit audit and a financial history check
A significant amount of government regulation applies
Regulations restrict loan options
Who Can Benefit from Private Mortgage Lending?
Private mortgage loans can be beneficial for:
- Those in need of quick financing
- Debtors who need money urgently to repay loans
- People seeking to repair their credit history
- Short-term loan seekers
- Homebuyers looking to finance their mortgage
Types Of Private Mortgage Lenders in Calgary
The following are the three most common types of private lenders in Canada:
Syndicate investors involve multiple investors who are pooling their money together for a single mortgage loan.
Each investor or private lender contributes funds to the mortgage project with the hopes of generating profits. If the loans pay off, profits are shared with all members of the syndicate.
An individual lender is a mortgage lender that typically works alone to provide financing for a private loan.
Investors looking to make a large amount of money with real estate find this type of lending appealing due to the low amount of startup capital needed.
Mortgage investment corporation (MIC)
A mortgage investment corporation (MIC) is a valuable financial instrument that a group of private individuals may utilize to diversify their investments into mortgages.
This type of private mortgage lender is often referred to as a group of investors who pool their personal funds to invest them in several mortgages to lend out to more borrowers.
Best Private Lenders in Calgary
Are you looking to find a private lender in Calgary, but you don’t know where to start?
When you’re looking at patronizing the private mortgage broker in Calgary, it makes sense that you want to go with the best option you can find.
However, It’s not easy to find the best private lender in Calgary. It can be challenging to determine which lender is right for you with all the different options available.
There is no need to worry any longer because the following list of the best private lenders in Calgary will help you make a good choice.
1. Josh Tagg – Mortgages for Less
This mortgage firm is run by Josh Tagg, a licensed mortgage broker with knowledge in the mortgage industry and whom clients can fully trust.
Joss Tagg – Mortgages for Less is a private lender and works with other private lenders to provide solutions and versatility to first-time buyers and those looking to refinance their mortgages.
This mortgage firm is one of the best private lenders in Calgary because it offers mortgage products that match your needs.
Whether you are self-employed, an investor, or a first-time buyer, Mortgages for Less will find the right mortgage solution for you.
Thanks to its connections and network of various trusts and banks, Mortgages for Less provides access to loans with rates as low as 1.74% and downpayment as low as 5%.
The mortgage brokerage even offers free mortgage quotes and credit analyses as a part of Josh’s business commitment to customer service.
2. The Mortgage Group
Looking for a mortgage broker that caters to both homeowners and investors? The Mortgage Group can help you with any type of real estate, whether a single-family home or commercial property.
Founded by Mike Boyle, The Mortgage Groups’ brokers strive to offer personal and attentive services to their clients and build long-term relationships.
Mike Boyle and his classically educated staff work hard to ensure their clients walk away feeling confident and stress-free and provide them with the best customer service out of any lender in Calgary.
The Mortgage Group is a broker for all of your finance needs, working with some of the most dependable lenders to provide flexible financing solutions for your investments.
With a loan interest rate of just 1.54% and flexible financing options that are only offered through these private lenders, you are sure to find the financing you need.
3. DreamHouse Mortgage
If you’re looking for a private Canadian lender, DreamHouse Mortgages is the right place to be. Our lenders have a range of possible mortgage lenders for any type of property.
From condos to apartments and even houses, DreamHouse will get you the loan of your dreams. With more than 12 different lenders to choose from, DreamHouse makes finding a suitable mortgage easy.
DreamHouse Mortgages strives to give you the best services and the most competitive rates. Their fixed-rate loans have a rate of 2.95% for 10-year terms, and their variable-rate loans have a rate of 1.55%.
4. Jencor Mortgage – Croft Axsen
Jencor Mortgage – Croft Axsen is one of the best private lenders in Calgary. They have worked on over $13 billion worth of mortgage deals.
With their friendly staff, competitive rates, and efficient process of mortgage approvals, they are one of the best options for mortgage loans.’
Also, Jencor Mortgage has one of the best reputations in Calgary, Alberta, Canada, for providing mortgages to local residents.
It is one of the biggest private lenders in the country, lending money to over 10,000 homes across Calgary. Additionally, it focuses on some of the best rates, offering fixed-rate mortgages at 1.74% and variable-rate mortgages at 1.2%.
The company’s long-term commitment to the industry even allows it to establish connections with reputable realtors so that it can provide complete assistance with all aspects of your home purchase.
5. True North Mortgage – Josephine Ng
Josephine Ng is One of the best private mortgage lenders in Calgary for several reasons. Because of its partnership with independent banks, companies, and crowdfunding platforms.
This private lender also offers access to various types of loans for as low as 1.09% with flexible terms depending on your purpose for borrowing money.
It can achieve such low rates due to its wide network and partnerships with various banks and lenders across the nation.
Also, True North Mortgage provides its services in three different languages, including English, Cantonese, and Mandarin, in addition to making mortgages accessible.
Tips on How to Choose a Private Mortgage Lender in Calgary
How do you choose the best private lender in Canada? The answer will vary depending on your situation.
When choosing a lender, here are some tips to help you improve your odds of finding the right match.
But here are some tips that can help:
1. Educate Yourself
If you’re looking for a private money lender in Calgary, I’m sure you already know that there are tons of lenders in this city.
Knowing what options you have and how the process works are advisable before signing a contract with your first private lender.
By getting familiar with the private lending industry, you will avoid making costly mistakes when borrowing money.
2. Choose a Direct Private Lender
As the name implies, direct lenders are lenders who deal directly with borrowers.
This is opposed to brokers, who do not lend money to people but act as intermediaries between borrowers and lenders.
By choosing a direct lender, you will be able to access your loan faster and avoid paying broker fees.
3. Consider Your Location
Private lenders lend according to location. Therefore, when looking for a private lender, it is critical to understand the types of lenders available in your area.
Also, it is essential not to choose a private lender based on the interest rate alone. In some cases, a lender may have a low interest rate, but not lend to your location.
4. Remember Good Reputation
When you need a private lender in Calgary, it’s essential to consider hiring a company that has a good reputation for providing loans.
The last thing you want to avoid is finding yourself involved in a lot of trouble when your private lender ends up failing or going out of business.
Review and referrals are good ways to find a reputable private lender.
Final Thoughts on Private Lenders in Calgary
Initially, you may think that finding the best private lenders in Calgary is difficult, but now you understand how simple the process is.
I hope choosing the best private lenders in Calgary will no longer be a challenge to you.
So what are you waiting for? Get in touch with your best private lender now!
Check Out: The Latest Calgary Homes For Sale
Are private lenders better than banks?
Private lenders are better than banks regarding fast loan approval and flexibility, but their interest rates are higher than banks.
What is a private lender mortgage?
A private mortgage refers to a loan from a private lender for the purpose of buying real estate.
Do private lenders check credit?
Credit checks are typically performed by most private lenders when processing applications. But a private lender can approve your loan even if you have a low credit score.
What do private money lenders look for?
Typically, private lenders look for properties that have profit potential; they want assets that are cash-positive.