Since banks usually have more strict requirements when it comes to loans, you can take out a mortgage from a private lender instead of traditional sources. Mortgages from private lenders are usually short-term asset-based loans, and the decision to lend is based on the value of your property as collateral, and not on your credit history. Private mortgages are also used by those who need immediate financing but who do not have the documents required by banks and other lending institutions.
Private mortgages are easier to get because the lender usually bases his or her decision to lend based on the asset used for collateral, which is the property. If the value of your property is high enough and you generate income that will pay off the interest of the loan, your personal financial situation will not affect the lender’s decision.
For non-income producing properties like homes, a private loan will get you at most a 55% loan of the appraised value of the property. Besides the value of the property, private lenders usually look at how the borrower intends to repay the loan before approving it. Since private mortgages usually last from six months up to three years, lenders have to consider if an exit strategy (how the borrower intends to pay the loan) is viable.