Congratulations on your decision to look for a mortgage lender. Now that you’ve honoured one of your New Year’s resolutions, how do you distinguish a good mortgage lender from a bad mortgage lender? To answer that question, first you’ll need to know what qualities different mortgage lenders in North Vancouver possess. Can they provide information on the widest choice of options and terms available for your specific needs? Can they serve as your personal guide in the mortgage marketplace and counsel you on the available financial alternatives? Can they arrange for a mortgage loan that you can comfortably manage? If you know the answers to these questions, it will be easier to search for sincere mortgage financiers.
Finding a trustworthy mortgage lender is essential to the success of your real estate investment and your personal relationship with them during the life of your mortgage loan. For many realty investors and home seekers, working with the right mortgage lenders in North Vancouver can mean the difference between a sweet deal and a bad deal.
The main advantage of working with private mortgage lenders is that you can escape the bureaucracy involved with the traditional lending process. As a matter of fact, the real estate market is extremely competitive and therefore, speed can really determine the success of a real estate transaction. Additionally, this kind of mortgage lender may finance a venture that the traditional lending institutions would refuse and will provide creative repayment options. Here are some important things to know about private mortgage financing:
LTV refers to the ratio between the requested mortgage and the total appraised value of the property, something which private mortgage lenders are always concerned about. A sincere mortgage financier should be honest with the borrower about their criteria for calculating LTV ratios, which can vary depending on the type mortgage loan you’re seeking to finance. For instance, the LTV ratio for raw land will typically be lower than that for a commercial building that produces cash flow. In other words, if the deal is considered very significant, the private lender will be more likely to lend the maximum percentage. If the deal is considered less than ideal, the percentage of the loan will be lower.
Private Lender Property Interest
Different private mortgage lenders in North Vancouver have different interests with regard to the type of property they’d be interested to finance. In most cases, the lender would most likely be willing to finance a property that is easy to sell if the borrower lands in default. This would most likely be a property that produces cash flow, as opposed to a dormant property, such as raw land.
Income Potential of the Property
Another important factor that every mortgage lender should take into account is the income potential of the property being considered for financing. Most lenders put a lot of emphasis on a property that provides sound collateral security. Sometimes they’ll even consider cash flow from other existing properties as a substitute.
The exit strategy of the borrower is essential to most private mortgage financiers. They’ll determine whether your repayment plans are feasible or not. For instance, if you’re planning to finance the debt by taking another mortgage, the private lender will need to consider your credit history.