FAQs
Frequently Asked Questions
Private lending involves borrowing funds from non-traditional lenders, offering flexible terms and faster approvals.
No, we provide consulting services and connect clients with private lending opportunities.
Private lenders are individuals or institutions offering loans outside of traditional banks.
Interest rates vary depending on the type of lending you are
looking for, property type and location, loan size, and whether the loan is in 1st or 2nd position. It is best to get in touch with us, so that an assessment can be done.
There are consulting, lender, legal, and banking fees depending on the lending terms & conditions. Fees are deducted from the loan amount and are not an upfront out of pocket expense.
As a property owner, it is your responsibility to put yourself in the best financial position possible to qualify for and transition from private financing. Our Lumi Consulting services include an exit strategy plan. This includes guiding clients towards a healthier credit, helping prepare financially for A/B Lending refinancing, etc. But we do understand that life happens. When your maturity date is coming up, you will essentially have the following options:
Refinance with a financial institution provided you qualify.
List the property for sale to an investor and become a tenant with a Rent-to-Own Program Agreement to buy-back in the future.
List the property for sale and move.
The options when property equity or value is lacking are few, but do exist. If the property is in an urban center or direct surrounding area and there is approximately 12%-15% equity in the home, the options would be as follows:
- Provide some cash injection to meet the private lender's criteria for the Loan-to-Value (LTV) requirements.
- If other property is owned where there is adequate equity, a Blanket Private Loan arrangement may be considered.
- Enter into a “ Home Rescue Buyback Rent-to-Own Program.” This is when an investor purchases your property from you as the current property owner. A separate agreement is also prepared by both parties with the intention of the home being purchased back at a predetermined date, when you can qualify for regular lending.
- Sell your property. If the equity is less than 10%, the suggestion is to simply sell your home, especially if you are close to a foreclosure situation.
Yes! Looking for direct private lenders can be time consuming, challenging, and the process of where to go is unknown. Borrowers that work by themselves must exercise caution to not end up in a situation that causes them to unknowingly sign over their home to the lending party. Our consulting services ensure this does not happen.
We take the stress, guesswork, networking/matchmaking work out of connecting you with reputable private lenders and lending opportunities.
We also go beyond approval, and focus on helping the borrower prepare a viable exit strategy so they do not need to utilize private lending forever. This saves time, money, and helps the borrower build a healthier financial situation in the process.
The process is relatively fast, provided we have received required supporting documents in a timely fashion from the borrower.
A home evaluation is required for all lending needs. Once this is completed and provided, our approval process typically takes 7 to 10 business days.
Required documentation depends on the facts of the file and the needs of the borrower, and will be determined at the time of application.
You can use other real estate property as additional security, as long as the property meets the loan to value (LTV) criteria as required. This is referred to as a Blanket Loan.
Our team has an extensive background in financial consulting and risk management solutions. We believe that private lending is a short-term option and should not be used to take advantage of our clients' vulnerabilities due to their current financial status. Our goal is to take you from your current financial position and guide you towards securing the most ideal financial position as quickly and seamlessly as possible. Our turnaround time, private lending consulting pre-underwriting processes, fees, transfer of funds and exit strategies are timely and efficient!
Unlike standalone private lenders, our process does not include brokerage and private lender fees.
Our team’s expertise in financial consulting and risk management ensures efficient & ethical solutions tailored to your needs. We’re committed to improving your financial position, not exploiting vulnerabilities.
Loan payments can be principal and interest OR interest only payments. A single lump sum payment can be made towards the principal on each renewal without penalty if your loan arrangement is interest only.
The cost difference over the course of a 12-month term is minimal (i.e.
assuming an 8% interest only on $100,000 would have a payment of $666.67 per month with a balance of $100,000 at the end of the term. An 8% principal & interest with a 30-year amortization term period would have a payment of $724.71 per month with a balance of $99,142.83 at the end of 12 months).
Because our private lending solutions are meant to be transition solutions, it
makes more sense from an accounting perspective to keep the private lending options as simple as possible.
Payments are to be made on a monthly basis. If your loan arrangement is interest only - principal payments can also be partially prepaid, or fully prepaid without penalty during the term.
