Private lending has exploded in the last few years. A combination of tightening of bank guidelines and consumer demand for money has helped fuel the growth of this once obscure industry.
Private lenders will lend primarily on the equity in your home, with less or no emphasis on your credit or income. As inviting as this sounds it comes at a cost, private lenders will charge a lot more than the banks, so the monthly payments are much higher.
It’s vital to really access why your borrowing money from a private lender and to think about a exit strategy to get out from under their higher interest rates. If you don’t plan properly the euphoria of getting the money will soon be replaced with the burden of high rates.
It’s important to really think about this source of ‘easy money.’
Any questions about private financing is welcome.