A private lender can be an individual, a group of individuals syndicating the funding for mortgages, or a more formalized mortgage investment corporation that pools the funds of its members to fund mortgage requests that meet the MIC lending and financing objectives.
But for the most part, private mortgage lenders are individual investors that have chosen to place all or part of their available capital into mortgage financing as apposed to other forms financing such as stocks, bonds, mutual funds, and even real estate.
In recent years there has been a growth in the number and sophistication of private lenders here in Canada.
This can be attributed to a number of things such as…
Regardless of the reason, more people with available money have gotten into the private mortgage lending arena and they have done so for one very important reasons… Private mortgage financing provides a very good return on investment and provides security for the investment in the form of real estate.
And even though there are a lot of private mortgage lenders around these days, they aren’t always easy to find.
As private individuals, many private lenders don’t even work directly with the public and prefer to work through mortgage brokers or lawyers to not only find potential deals, but administer the application and funding process as well.
Added to this lack of public presence is the fact that private lenders are continually IN and OUT of the market based on the money they have available at any one time.
When money comes available to invest, they want to place it as quickly as possible so they’re not loosing out on any investment returns available to them.
So at certain times when they have no available lends to put into a mortgage, they are going to be out of the market.
Private mortgage lenders also tend to focus on some combination of geographic area, property type, and mortgage funds application. For instance, while one private lender may be prepared to finance a commercial construction mortgage in Toronto, the next one may not.
So its always going to be important to be talking with a private mortgage lender that is capable and interested in your specific requirements, otherwise they either are not going to be much help to you, or will charge higher rates due to their lack of comfort in the risk associated in the deal.
The best way to get access to a private mortgage lender who is relevant to your financing requirements is to work through an experienced private mortgage broker who has well established relationships with a broad cross section of private lender sources in your area.
If you’re trying to locate a private mortgage lender in Southwestern Ontario including Toronto and the Greater Toronto Area, I suggest that you give me a call so I can quickly assess your requirements and put you in direct contact with relevant private mortgage lenders.