Perhaps you are considering a home refinance through a bank or adding an additional second or third mortgage? You may be starting a new business, considering a home renovation, have urgent family needs or have other reasons to borrow equity from your home from a private lender.
In order to finance your needs, you may opt to refinance your home, by obtaining a new, larger mortgage or line of credit, or, you may seek to borrow money from a private source.
Refinancing your home may also involve the consolidation and paying off of existing, non-secured debt, such as credit card debt, personal line of credit debt, and personal financing. Refinancing is also an effective way of obtaining a new registered line of credit, that allows you to borrow against your home, without constantly going back to the bank.
Borrowing funds from a private lender is appealing for the simple reason that you will not be subjected to the same stress tests that the conventional banks require all applicant go through. However, if you are borrowing funds from a private lender, it can be an expensive, and time consuming financing alternative, if you are not familiar with the process.
There are many fees, side-effects, legal jargon, and interpretations, that can add to this mortgage alternative complexity, if you are not familiar with or knowledgeable about the details of this financing option.
You may want to read NLPC’s ‘Six Factors to Consider Before Contacting a Private Lender’ white paper, which provides additional details about private lending and the need to have a lawyer involved at all steps of a private lending arrangement, and especially prior to engaging with private lending.
Nichols Law has experience in working with private lending transactions, and working with mortgage refinancing with banks. If you are considering these financing alternatives, Nichols Law can help you navigate the confusion, and approach this financial solution with greater knowledge so you can make informed decisions and help limit the fees you are paying.