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  Category: Articles » Finance » Mortgages » Article
 

Private Money For Your Mortgage Bind




By Dan Lewis

When you get in a financial bind, traditional home loan lenders often will not touch you with a ten foot pole. In such a situation, it is time to look for other lending sources.

Private Money For Your Mortgage Bind

Traditional home loan lenders are a rigged group. They have all types of checklist and algorithms they use to determine whether money should be provided to a borrower in a particular situation. While there are literally tens of thousands of lenders offering loans, the actual scenarios they will act on are much, much smaller. If you fall outside of these, you are going to have little if any luck getting financing. All is not lost, however.

Assume you are a homeowner who runs into a financial bind that requires borrowing against your home. Examples of such situations can include the loss of a job, sudden exposure to massive medical bills and so on. In such a situation, seeking financing from a traditional lender is going to be brutally tuff. In the case of a lost job, the home loan lender is going to balk at giving you money when you have no steady income. Indeed, this is the very reason you need the money! This catch-22 situation can lead to extreme frustration when you are sitting on equity, but can't use it. Private money may be the answer.

Real estate is an very good investment. You know this because you own a home and watch it appreciate each year. For investors with cash on hand, real estate is considered a very lucrative opportunity. These investors will often pool their money in partnerships or corporations with the idea of creating a source of money for unique lending opportunities. When you cannot get funding from a traditional home loan lender, these investment groups represent your salvation. The salvation is known as a private money loan.

Private money loans are exactly what they sound like. A group of investors are willing to provide you with financing for tough situations that regular banks will not touch with a ten foot pole. These investment groups tend to look at your overall situation, not checklists and algorithms calculating your debt to income ratios and so on. Because of this approach, these lenders will write loans for practically any situation. In exchange for financing you when banks will not, private money loans are more expensive. You can expect higher interest rates, shorter pay back terms, higher costs and higher points than you would face with a tradition loan. When you can't get financing anywhere else, this is simply the price you pay to hold off a foreclosure and so on.

Finding these lender can be a challenge for most borrowers. Simply put, most traditional lenders do not offer this type of financing. Call any of the lenders you see in advertisements or hear on the radio and you will come up empty. If you need private financing, your best option for locating these private lenders is to speak with a mortgage broker.
 
 
About the Author
Dan Lewis is with http://www.gwhomeloans.com - mortgage brokers providing San Diego mortgages.


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  Some other articles by Dan Lewis
Finding and Borrowing From Wholesale Mortgage Lenders
At first glance, the mortgage finance market seems fairly simple. Banks lend money, so you just contact a bank for financing. If you take this approach, you ...

Underwriting and the World of Home Loans
In the world of home loans, nothing is more dour sounding than underwriting. Cutting to the chase, this is where you get approved or denied for your borrowing request. Underwriting and ...

Be Careful When Squeezing into a Mortgage
Buying a home is an emotional decision and most people try to get the best the possible can afford. That being said, one must be careful when squeezing into a mortgage. ...

Things to Consider When Choosing an Adjustable Mortgage
If you have looked into mortgage loans at all, you know the two primary choices are fixed and adjustable mortgages. Adjustable mortgages may seem a good ...

  
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