Becoming a private lender could be a great tool to expand your investment portfolio. DavyLaw has perfected the legal aspect of private lending.
Private Mortgage
Process of Private Mortgage
Private lender is a great way to diversify your investment portfolio. Private mortgages are relatively safe investments due to the stability of real estate. You can create your own mortgage term, from lender fee and interest rate to term and amortization. It is extremely important to have a lawyer review or draft your mortgage commitment to make sure all the required information is included in the documents.
01. Onboarding Meeting
During our onboarding meeting, we discuss every step of the deal to ensure that everything is completed up to your standard. Depending on the stage of the process you are in, we will establish the scope of work on your file and request all the required documents from the borrower’s lawyer.
02. Title Search
We will complete a title search of the subject property to review the status of the property. The search confirms if the borrower is the legal owner and if there are any liens or easements on title. This ensures that your investment will be secured upon a property with no issues.
03. Closing Preparation
Once the commitment is drafted and title search is completed, we will finalize the signing documents for both lender and borrower. The borrower will sign the documents with their solicitor of choice. In addition, we always make sure that the lender has title insurance coverage.
04. Closing Date
Upon receipt of the signed documents and satisfaction of conditions in the commitment, the mortgage can be registered, and the funds can be disbursed to the borrower.
Frequently Asked Questions
Yes, if the loan does not exceed the amount of $50,000.00. For any mortgage above the amount of $50,000.00, the borrower will be required to retain their own counsel.
Normally, the lender’s legal fee is deducted from the mortgage funds. This means that the lender will advance the funds to their lawyer and their lawyer will deduct all of the incurred fees before advancing the funds to the borrower’s lawyer.
This depends on the responsiveness of parties and the amount of due diligence required. Normally, a private mortgage transaction can be closed within a week’s time.
Looking to lend funds?
Click the link below to complete our onboarding form and to book a meeting with our lawyers.