A lot of people think mortgage brokers offer loans that have high upfront fees and heavy interest. Clearly, this is not true, but it doesn't mean that we still don't have these loans avaialble. Is there ever a time that its a good idea to use them? Private Lenders exist for a reason. Here are some of them:
1. Pending Bankruptices
If your home is in bankruptcy and you are equity rich, using a private lender is a very good idea to stay in your home. Another advantage with private lenders is that you can have your mortgage prepaid, which means no payments are required till the end of the term. Make sure that you have a good equity postion and can afford the payments.
2. Doing a Big Renovation
When your using a progress draw from a bank the process can be lengthy and the interest rate is higher than most "A" rate mortgages. Also construction loans require payments during the process where many people are required to service a rent payment or other living arrangements. A lot of borrowers simply find private loans easier.
3. Fix and Flips
Private Loans are great products for investors. There are no TDS and GDS requirements, and the ability to borrow money over and over again is a very easy solution.
Private loans are just like any other mortgage product. There are not bad loans, just bad for some situations.
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