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Tuesday, 18 October 2011

Angels in the lending world: when the bankers no longer help

Angels in the lending world: when the bankers no longer help


Where do you turn to if a traditional mortgage lender such as bank, trust company or mortgage
investment company says “no” to your borrowing needs?

Try a private lender.

Private lending is truly one of the world’s oldest businesses. For as long as organized humans
have owned or possessed anything of value, they have either borrowed money or loaned money
against the item of value. Transactions in the ancient world were normally done by and between
individual persons and not companies.

In the past 100 years, the main source of money lending became banks, corporations and
sometimes governments. However the draw back of these types of lenders is that they have strict
rules when it applies to income, credit history or type of collateral.

With the advent of email and the internet, technology has made it possible for the reappearance
of “person to person” lending, which is an exciting time for people who find it difficult to qualify
within today’s corporate controlled lending environment.

Why is a private lender easier than a bank?

Private lenders are people too. They make their lending decisions on a combination of business
sense, common sense and instinct. They have hopes, dreams and emotions just as the
borrowers do. So long as your story makes sense and so long as you have something of value,
odds are is that you may be able to borrow money.

Who are Private Lenders?

Any one who has saved money and is willing to lend it out. They could be people you already
know such as a member of your family, or someone you know at work, or perhaps someone in
business or simply a stranger off the street.

Many private lenders are hardworking people themselves, who have struggled to save money
through business or work. Many are retired persons who have accumulated wealth over their
lifetime and now choose to help others. No matter who the private lender is or how they made
their money, these individuals have made a conscious decision to help others, through the
business of lending money.

What do Private lenders use as security?

Depending on the lender, any item of value. Normally it is real estate such as buildings and land
however some lenders have lent on precious objects (ie: gold, diamonds), art, automobiles, or if
you own a company, your can even pledge your accounts receivables.

What type of lending do Private Lenders do?

You can often borrower first mortgages, second mortgages, third mortgages or even short-term/
bridge loans.

What are the rates private lenders charge?

Private lenders can charge any rate they want, however the legal limit is 60%. Normally lenders
will range from as low as 8% to as much as 18% interest. On average, you can expect to pay
between 12% and 14%. Sometimes private lenders will charge fees. Private lender rates are not
as low as bank rates but in many cases, these rates are far less than credit cards and overdraft

rates, which can be as much as 24%. And they are far cheaper than pay day loan companies
who are known to charge beyond the legal limit of 60%, sometimes as much as 400%.

The key point to understand about private lenders is that they are a potential option, when you
don’t have one.

How do I find a Private Lender?

Ask your banker
Ask your lawyer
Ask your accountant
Ask your mortgage broker
Look up in the internet under keywords “private lending”

Borrower and Lender Beware.

Although this article talks about the good things when dealing with private lenders and private
borrowers, remember that whenever you are borrowing or lending money privately, you should
always have legal representation. There are plenty of examples of problems faced by both
borrowers and lenders. For example, a borrower signs up to a private loan that has very strict
repayment terms. Or, a lender loans money and never has it paid back.

If you are a borrower, make sure you use lawyer whom you trust, to represent you, no matter how
small the transaction. If the lender says “use our lawyer”, respectfully decline and find your own
lawyer. This is your safest way to go.

If you have extra money and are interested in becoming a lender, get professional help from
either a lawyer or mortgage broker who is well versed in private lending. Make sure you get
references from your mortgage broker before you deal with them.

There is more to this subject than what you see here, so if you are interested in either lending
or borrowing, do your research first. If you have questions regarding private lending from
either a borrowing or lending perspective, call MortgageQuote Today at 403-590-6610, or visit
www.privatelender.org, home of Canada’s Private Lending Network.
What type of lending do Private Lenders do?

You can often borrower first mortgages, second mortgages, third mortgages or even short-term/
bridge loans.

What are the rates private lenders charge?

Private lenders can charge any rate they want, however the legal limit is 60%. Normally lenders
will range from as low as 8% to as much as 18% interest. On average, you can expect to pay
between 12% and 14%. Sometimes private lenders will charge fees. Private lender rates are not
as low as bank rates but in many cases, these rates are far less than credit cards and overdraft

rates, which can be as much as 24%. And they are far cheaper than pay day loan companies
who are known to charge beyond the legal limit of 60%, sometimes as much as 400%.

The key point to understand about private lenders is that they are a potential option, when you
don’t have one.

How do I find a Private Lender?

Ask your banker
Ask your lawyer
Ask your accountant
Ask your mortgage broker
Look up in the internet under keywords “private lending”

Borrower and Lender Beware.

Although this article talks about the good things when dealing with private lenders and private
borrowers, remember that whenever you are borrowing or lending money privately, you should
always have legal representation. There are plenty of examples of problems faced by both
borrowers and lenders. For example, a borrower signs up to a private loan that has very strict
repayment terms. Or, a lender loans money and never has it paid back.

If you are a borrower, make sure you use lawyer whom you trust, to represent you, no matter how
small the transaction. If the lender says “use our lawyer”, respectfully decline and find your own
lawyer. This is your safest way to go.

If you have extra money and are interested in becoming a lender, get professional help from
either a lawyer or mortgage broker who is well versed in private lending. Make sure you get
references from your mortgage broker before you deal with them.

There is more to this subject than what you see here, so if you are interested in either lending
or borrowing, do your research first. If you have questions regarding private lending from
either a borrowing or lending perspective, Contact MortgageQuote.ca 1-866-948-7283 for details. Or Apply Now for your mortgage.