Over the past few years, mortgage brokers across Canada have become more and more familiar with what a private lender is. With an ever-changing market it’s important for brokers to do their due diligence and many times private lenders are a great option to look at.
When dealing with private lenders, there are many important factors that mortgage brokers should consider, ensuring they are working with reputable and reliable partners.
The next section will outline what you should look for in a good private lending partner.
What to look for in a good private lender
Credibility and Reputation: Take your time and search up the private lender’s background and reputation in the industry. Search for online reviews, testimonials, and see what other brokers or borrowers who have worked with them in the past have to say.
Experience: Get information about the type of loans the private lender offers and see what their track record is. Some private lenders specialize in certain types of properties or borrower profiles. You want to work with a lender that has a deep understanding of the market.
Interest rates and terms: Each lender offers different interest rates and terms, which can offer great flexibility to borrowers. You need to make sure the borrower is protected and understands all of the costs and terms associated with the lender in question.
Efficiency: Compared to traditional banks, private lenders often times offer faster loan processing and funding. Speak with lenders, describe what the borrowers needs are, and find out what the estimated turnaround time is.
Transparency: Open and transparent communication is vital when dealing with private lenders and wanting to work with them long-term. You want a private lender who explains terms and costs upfront without any confusion.