Several Reasons To Use Private Mortgage Lenders - What is Private Lending?

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Several Reasons To Use Private Mortgage Lenders - What is Private Lending?

Update 2.

Private lending is fundamentally "the oldest form of mortgage lending". The borrower and lender have what I would term a direct, personal relationship. It is the lender (or his nominee) who is the mortgagee and who holds the security. 

With financial institutions, there is no such direct relationship in the sense that the institution makes loans using funds which have either been pooled for the specific purpose of making that loan or raised from the capital markets, deposits by investors or other security instruments for making loans generally. Simply put, in the usual banking relationship, investor deposit funds with the bank and the borrower obtains finance from the bank. The investor is paid a conservative rate of return and has no knowledge of the particular loans that the deposit is funding.

Little Rock operates in the private lending market in its simplest form, where one investor provides the capital for one loan. We collect and present material and information to private investors in a format where the investor may complete due diligence and make an informed decision as to whether or not to make a loan. 

In the private lending arena, the investor may consider transactions which do not fit within the guidelines of current institutional lending, and the pricing of such loans will depend on  urgency, nature of the property to be secured, loan to valuation ratio (which is generally conservative), period for which the funds are required and the reason for the loan. By it’s nature, private lending is usually a “bridging” loan alternative. 

Transactions funded in the private market are usually not ones covered by the National Consumer Credit Code, and in its simplest for, other than with respect to the law in general, are not regulated by the Australian Securities & Investments Commission nor the Australian Prudential Regulation Authority.