Private Lending

Do I Need A Private Lender?

If you have poor credit, a history of bruised credit, previous bankruptcy, unpaid taxes, or are undergoing significant life changes like consolidation, private lending might still be an option for you, but you'll need to approach it with caution and explore specific avenues tailored to your situation. Here are some considerations:

​

• Subprime Lending: Private lenders often specialize in serving individuals with less-than-perfect credit histories. There are lenders who focus on providing loans to individuals with poor credit scores or previous bankruptcies. However, be aware that these loans may come with higher interest rates and less favourable terms.

• Collateralized Loans: If you have valuable assets such as real estate you may be able to secure a loan using these assets as collateral. Collateralized loans can sometimes be easier to obtain, even with poor credit, as the lender has recourse in the form of the collateral if you default on the loan.

• Private Mortgage Lending: If you're looking to finance a property purchase or refinance an existing mortgage, private mortgage lending could be an option. Private mortgage lenders may be more flexible than traditional banks when it comes to credit history and income verification, but that may require a higher down payment or charge higher interest rates.

• Hard Money Loans: Hard money loans are short-term, asset-based loans and/or bridge loans that are often used by real estate investors or individuals who need quick access to cash. These loans are typically secured by the value of the property rather than the borrower's credit history, making them accessible to individuals with poor credit.

• Credit Repair: Before applying for a loan, consider taking steps to improve your credit score. This may involve paying off outstanding debts, disputing any errors on your credit report, and establishing a history of responsible financial behaviour. Improving your credit score can increase your chances of qualifying for a loan with better terms.

• Seek Professional Advice: Given your complex financial situation, it's advisable to consult with a financial advisor or credit counselor who can provide personalized guidance and help you explore all available options. They can assess your financial situation, provide recommendations, and help you navigate the lending process more effectively. If your facing any of the above circumstances it’s critical to address these challenges promptly to mitigate your losses and expenses. 

• Your Financial Situation: Start by conducting a thorough assessment of your financial situation. Calculate your monthly income from all sources, including pension and disability benefits, if applicable. Then, list all your expenses, including mortgage payments, property taxes, utilities, and other essential living expenses. Understanding your cash flow will help you identify areas where you can cut costs or reallocate funds to prioritize mortgage and tax payments.

• Communicate with Your Lender(s): If you're struggling to make mortgage payments or property tax payments, contact your lenders and tax authorities as soon as possible. Explain your situation honestly and inquire about any available assistance programs or options for restructuring your payments. Lenders and tax authorities may be willing to negotiate a payment plan, temporarily reduce your payments, or offer other forms of assistance to help you avoid default.

• Seek Financial Counselling: Consider seeking advice from a financial counselor or housing counselor who can provide guidance on managing your finances, negotiating with lenders, and exploring available resources. These professionals can help you develop a budget, prioritize your expenses, and navigate the process of addressing mortgage and tax arrears.

• Consider Mortgage Modification or Refinancing: If you're facing long-term financial challenges, explore options for modifying your mortgage terms or refinancing your loan. Mortgage modification programs may allow you to renegotiate the terms of your loan, such as extending the repayment period or reducing the interest rate, to make your payments more affordable. Refinancing your mortgage could also lower your monthly payments by securing a new loan with better terms.

• Review Your Housing Options: If you're at risk of losing your home due to foreclosure or power of sale, explore alternative housing options to avoid homelessness. This could include downsizing to a more affordable property, renting out a portion of your home to generate additional income, or exploring government-subsidized housing programs for low-income individuals

• Seek Legal Advice: If you're facing foreclosure or power of sale proceedings, consider seeking legal advice from a qualified attorney who specializes in real estate or foreclosure defense. An attorney can review your situation, explain your rights and options, and represent your interests in negotiations with lenders or legal proceedings.

​

Speak to one of our mortgage professionals to see if one of our alternative lenders, “B” lenders, MIC’s  and/or private lenders  are right for you.  Perhaps there is a better way to stay in the home and service your debt. We deal with quite a few so it’s worth a chat. 

Harvest Mortgage is a affiliated corporation, funded by a pool of private investors offering competitive rates and terms. If private lending is right for you click on the below link.

www.harvestmortgage.ca/investors