Traditional financial institutions sometimes exclude businesses who are capable of paying back their loans, but don’t qualify for a traditional mortgage. Private mortgage lenders are ideal for self-employed individuals and people in tough credit situations.
Private mortgages are no different than a bank loan. Usually short-term, interest-only loans, they don’t require the borrower to pay the mortgage principal down. Instead private lenders ask that borrowers provide a monthly interest payment. Private mortgage lenders tend to account for the properties overall value, as opposed to just the borrower’s credit history. Plus, approval times can be much faster than the average mortgage loan approval process at a traditional financial institution or bank.
