Using a Private Lender to Buy Property
It is a common misconception that only banks and traditional financial institutions are able to provide mortgages, when in fact there are a number of non-bank lenders that are capable of providing just as good (if not better) arrangements for clients who do not necessarily want to deal with a bank.
Some of the advantages of using a private lender to buy a property, whether it be for investment purposes or for you to live in yourself, include:
Less red-tape
When using a private lender to buy property, there will generally be less paperwork and less bureaucratic hold-ups. This is due to private lenders generally having a smaller clientele and dealing with loans by looking at the underlying security on the property, as opposed to the big banks that receive so many applications that they are all bundled together and, during the first stage of approval, only look at surface figures.
Flexibility
Private lenders are more flexible in their lending criteria than traditional financial institutions, and tend to be more willing to give loans to those who have previously been unsuccessful at securing a mortgage for their desired property. This includes those who are self-employed or those who are classified by banks as ‘high risk’ due to a history of bad credit scores. Private lenders such as Easy Settle Finance are different, in that they take the applicant’s circumstances and other influencing factors into consideration before approving or rejecting an application.
However, it is important to note on this point that private lenders are still subject to strict Australian regulations as specified by the Australian Securities and Investments Commission (ASIC) and legislations including the Australian Securities and Investments Commission Act 2001 under the Commonwealth’s Corporations Act 2001 and the National Consumer Credit Protection Act 2009. This means that private lenders are required to practice ‘responsible lending’, and so are are not allowed to provide loans to those who are financially unable to repay them.
Speed
Private lenders take a lot less time to release mortgage funds to those that have had their mortgage application approved. This could mean the difference between being able to buy your dream property or missing out on it because someone else made an offer first. If you need a mortgage fast and don’t think that a bank will be quick enough, a private lender is the perfect solution to your problem.