In reality, anyone can be a private mortgage lender if they choose. If you have the funds to extend, you can be a private lender.
Many private money lenders are also real estate investors. Being involved with real estate properties within a certain market area gives them the ability to assess the market value of the property and make a lending decision. At the same time, there is nothing that says that someone that is not a real estate investor can’t provide private mortgages either.
Toronto private money lenders, for the most part, are a providing home equity loan in the form of a residential home mortgage or commercial property mortgage. These mortgage financing opportunities occur largely because bank or institutional financing can’t be arranged at all or within a required time period.
The reasons for requiring a private mortgage are similar to the reasons for acquiring a conventional mortgage … property purchase, home mortgage refinance, debt consolidation loan, and so on.
In order to properly and efficiently conduct business, a Toronto private money lender will tend to work through a lawyer and a mortgage broker. The lawyer provides all the documentation and mortgage registration requirements while the mortgage broker brings applicants that meet the requirements of the private lender.
Each private money lender or private lending group will have their own focus in terms of what real estate they are prepared to finance, where its located, the amount of financing they are prepared to extend, terms and rates, etc.
From a customer point of view, a private mortgage works the same as any other type of mortgage, carrying the same legal property registration and providing the same rights under the law to both borrower and lender. The terms and conditions offered can be different as they are with any mortgage, but the basis of the agreement between borrow and lender is pretty much the same.
Because there can be considerable variation in deal interest from one private lender to another, its important to try and approach those individuals who are most relevant to your particular situation and requirements.
The only way to effectively do this is to deal through an experienced mortgage broker that has considerable private lending sources and a track record for locating and closing private mortgage financing requests for the type of property you have.
If you’d like to locate Toronto private money lenders, we suggest that you give us a call and speak to a member of our team and we’ll connect you into relevant private lending sources.