House Flippers Love Private Lenders – Here’s Why!
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Although house flipping has become a popular practice, anyone who does it to earn a living will know how challenging it can be to obtain financing from regular banks to do so. However, these days, flippers are normally able to obtain bad credit mortgages in Oshawa through private lenders far easier than through traditional mortgage lenders.
#1 – A private lender is more willing to assist
Many regular banks view house flipping as a risky practice, because there is no guarantee that the home in question will be sold at a profit or even at the price that was originally paid for it by the flipper. In some cases, these homes can even end up being sold at a loss, especially if they are in not-so-desirable neighborhoods or if too many improvements are done on them for the particular area they are situated in. Private lenders on the other hand are normally willing to provide poor credit mortgages in Oshawa to house flippers because they know that in most cases, they will be repaid relatively quickly.
#2 - Private lenders cater more for short term mortgages
Most traditional mortgage products rely on home buyers taking anywhere up to 30 years to repay them in full. However, when obtaining a poor credit mortgage in Oshawa through a private lender or mortgage broker, the repayment period is normally far shorter – anywhere from 1 to 5 years at the most. This is an ideal scenario for house flippers because they normally don’t have the properties in their possession for more than a few months to a year at the most – unless major repairs or renovations need to be done to render it livable.
#3 - Faster approval processes
House flippers have been labeled as such because of their ability to hustle and ‘flip’ properties in relatively short timeframes, which means that they need mortgage products that are able to keep up with their pace of work . When obtaining a private or bad credit mortgage in Oshawa, house flippers can expect to receive approval within a few weeks at the most – unlike with regular mortgage application that can take anywhere up to 60 days to approve. By this time, the property in question may have been snapped up by someone else who managed to obtain faster mortgage approval.
#4 - Applying for a bad credit mortgage in Oshawa
Although the process of applying for private or poor credit mortgages in Oshawa may be quicker and require less stringent conditions to be met, this doesn’t mean that less documentation will be needed to do so. Flippers will still be required to provide tax information, proof of income, credit reports and other financial documents in order to apply for private mortgages. The interest rates they obtain will still depend on their credit score as well.
If you are a house flipper who is struggling to obtain a private or poor credit mortgage in Oshawa, contact us today and speak with our private lending experts. They will be able to assist you with every step of the application process and help you obtain the best deal possible.