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5 Questions To Ask When Applying For A Private Mortgage

When you are in the market for a commercial property, one of the options you may consider is a private mortgage. This can be a great option for many people, but it’s important to ask the right questions before you apply. In this blog post, we will discuss five questions that you should ask when applying for a private mortgage. By asking these questions, you can be sure that you are making an informed decision and getting the best possible terms for your loan.

Question 1: What are the interest rates and loan terms?

As with any loan, it’s important to understand the interest rates and terms before you agree to anything. With a private mortgage, you may be able to negotiate better terms than you would with a traditional lender. Be sure to ask about the interest rates and terms of the loan before you agree to anything.

Question 2: What is the loan-to-value ratio?

The loan-to-value ratio (LVR) is the amount of the loan compared to the value of the property. This is an important number to know because it will affect how much money you need to put down and how much you will need to repay each month. A higher LVR means that you will need to put down more money and/or make higher monthly payments.

Question 3: What are the fees associated with the loan?

As with any loan, there are going to be fees associated with a private mortgage. These fees can include origination fees, valuation fees, and settlement costs. Be sure to ask about all of the fees so that you can be prepared for them.

Question 4: Can I make extra repayments?

Some loans have restrictions on how often you can make extra repayments or how much you can pay each time. If you think you may want to make extra repayments, be sure to ask about this before you agree to the loan. It is also important to familiarise yourself with the repayment schedule as it can impact your cash flow, especially if you want to make extra repayments.

Question 5: Do I qualify for the loan?

Before starting the application process for a loan from a private lender it is important to check the terms and conditions on who they can loan to. Many lenders have restrictions in place so that only those with an active ABN and commercial real estate can apply for these private mortgages. Before you complete an application, speak to your lender and get an indication if they can assist you. 

Considering a private mortgage? Contact Pacific 8 today

If you are considering a private mortgage for your commercial real estate needs, be sure to ask these five important questions. By doing so, you can be sure that you are getting the best possible deal on your loan. Do you have any other questions that you would like answers to? Call us today and we would be happy to assist you.