Evolution Of Private Mortgage Lending
“Private Mortgage Lending Continues To Expand And Evolve Across The Real Estate Market”
Over the last number of years, private mortgage lending has been growing in terms of 1) the amount of funds available, 2) the number of private lenders, and 3) the applications for private financing.
There are many contributing factors to this including 1) sub par stock market performance over the last decade or so, 2) baby boomers wanting to move all or part of their investment portfolios into more short term or highly liquid investments, 3) institutional lender being more conservative on the types of deals they are prepared to fund.
With more fund available from more lenders there is also broader coverage of the market with many private lenders targeting very specific areas and niches of the mortgage market.
Private lenders are also acting more and more like banks as there are more mortgage investment corporations and collaborative private lender arrangements in place today than ever before, providing a similar type of financial store front approach to the market place.
That being said, the majority of private mortgage lenders are still individuals who are managing their own investment portfolios and making their own decisions.
For an individual or business looking for mortgage financing, the new world of private mortgage lending can provide considerable options and choices.
In some situations, private lenders will even rival what a bank or institutional lender will offer in terms of interest rates making them a realistic option for more than those with bad credit or in financial distress.
While private mortgage lending remains a short term form of mortgage financing for the most part, it can provide a number of unique advantages that can’t be found through a bank or institutional lender.
For instance, a private mortgage can be arranged in a fraction of the time that it takes to get a bank or institutional mortgage in place. When time is of the essence, a private mortgage can be a preferred option to close on a real estate purchase, refinance an existing mortgage, or provide capital for some other purpose.
In some cases, businesses utilize private mortgages to secure short term capital in order to provide them with time to go through an institutional borrowing process that is hard to predict in terms of time.
As private mortgage lending continues to evolve, borrowers will have more choice available to them in the market, which is almost always a good thing.
If you are in need of a private mortgage, or would like to better understand your options for mortgage financing, I suggest that you give me a call and we’ll go over your requirements together.