Private Mortgage lending offers an alternative to Bank Financing

Because of the financial meltdown that sent millions of people into foreclosure there has been a crackdown on the income and credit worthiness of individuals that are applying for loans and mortgages. While income may not be an issue there are a lot of people who have questionable credit and who need a loan to get into a house, but who are being turned down by the banks. As an option that is proving to be beneficial to the subprime homeowner there are hard money lenders that offer private mortgage lending to individuals that want to forego the credit approval process and who are interested in closing on a house that they can easily afford.

Working independently of the banks hard money lenders are private individuals that have access to a large pool of cash and who can extend a loan to someone that has been turned down by the traditional banking system. Where the value of a home is making it possible for someone to purchase a property that is worth more than they are asking for the private lender can review their requirements for extending a mortgage thereby allowing someone with marginal credit to secure a loan for the house that they are buying. In some cases the hard money lender is able to provide what is called a bridge loan that allows the buyer to purchase the property they want while their conventional lender is considering the loan and awaiting approval of the paperwork. Instead of missing out on the purchase of a piece of property the individual that is financed through a private loan is able to acquire the home or commercial building that they are purchasing and pay off the investor within a couple of months as the banks fall in line and approve the mortgage that is pending.

With the discretion to allow someone to buy a house that might not qualify on their own there is a need for the private lender to maintain a clientele that are paying for the privilege of using cash to make property purchases and hold the deed to the buildings that are financed through their generosity. When the options for buying a house are slim and the position of the banks is to prevent a buyer from purchasing a house within three years of a short sale and seven years of a foreclosure there are ways that someone who can afford a mortgage can get into a house that they are buying without working through the banks or the government FHA program. Financed through private mortgage lending people that are looking for a home loan can find the help that they need to purchase a house without the need to apply for a loan through the bank.