Short term loans are also known as private mortgages. The mortgage usually lasts for about six months to three years. They are usually more expensive than a conventional loan and it is most opted for by those who don’t qualify for it. It is also a great option when you need money quickly and doesn’t have the time to wait for bank approvals. However, when you plan to take a private mortgage, you must approach a Certified Mortgage Broker. Before you take a private mortgage, you must know the advantages and the disadvantages.


  1. Less Interested in your past: Private mortgage is considered to be the best option for those who don’t have a great credit history as the private lenders show lesser interest in it. The loan is given based on the value of the property which is kept as a security against the loan. It is also a great option for those who are self-employed.
  2. Less Turnaround Time: When you are applying to a financial institution for a loan, it might take days before you hear back from them. With a private mortgage, this turnaround time is short. When you are looking for quick funding, it becomes the ideal option as you would be hearing back in a matter of days and not weeks.
  3. Can Use unconventional properties: Whenever you are taking a loan, you need to provide security against it. With conventional banks, there are certain guidelines that you need to abide by. In the case of private lenders, you can make use of conventional properties and get your loan against them.
  4. Specialisation in Particular Field: Most of the time the private lenders have specialization in the field for which they provide a private mortgage. When they are lending you money they have a better understanding of the circumstances and the kind of financial requirements that you might have.
  5. Helps in improving Credit Score: When you have a lot of unsecured debt like unpaid credit card bills and personal loans, you can consolidate all of it by taking a private mortgage. Clearing off all your consolidated debt will help to improve your credit score and reduce your interest rate.


  1. High-Interest Rate: Private lenders tend to charge higher interest rates against the private mortgage in comparison to the conventional mortgage rates.
  2. Short term: When you are taking a private mortgage, you can pay it off anytime between a year to three months. Before taking a private mortgage, you need to have a plan in mind about how you will be paying back all the money within the estimated time. With a conventional mortgage, you can pay it back slowly.
  3. Higher Closing Rates: In the bigger picture, the private mortgage does turn out to be a more expensive option as the closing cost is also higher. This is because you are required to pay the commission and the appraisal costs. All of this put together only increases the cost.

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