Private Lenders Club - Frequently Asked Questions

>> What is Private Lenders Club™?

>> Does Private Lenders Club™ administer any funds?

>> Who are the Private Lenders Club Brokers?

>> Who Uses Private Lenders Club Services?

>> What If I Have A Self Directed RRSP?

>> What Can You Do With $ 10,000.00?

QUESTION:
What is Private Lenders Club™?

ANSWER:
Private Lenders Club™ is a global service company committed to efficiently and effectively finding a funding match for its Private Lenders Club Members. The identity of the Member will not be disclosed until the terms and conditions of a Member’s willingness to fund has been accepted by a Broker’s client. Then and only then will the name of the Member be made available to the Private Lenders Club Broker and their client.

QUESTION:
Does Private Lenders Club™ administer any funds?

ANSWER:
Private Lenders Club™ handles NO funds. All funds are administered by the Member’s designated lawyer. Private Lenders Club™ is neither a lender nor a mortgage broker. Private Lenders Club™ is a global service company committed to introducing Members to the hundreds of non-conforming deals that arise each day.

QUESTION:
Who are the Private Lenders Club™ Brokers?

ANSWER:
Registered mortgage brokers and real estate brokers who abide by the investor/lender disclosure requirements as dictated by the jurisdiction within which they legally operate. By registered agreement Private Lenders Club™ gives a registered Broker the authority to request a search for suitable private funding.

It is through these registered Private Lenders Club Brokers that ALL borrowers must submit their Broker Funding Requests (BFRs). Should a borrower contact Private Lenders Club™ directly their request will automatically be referred to the nearest Private Lenders Club Registered Broker.

Private Lenders Club™ is not in the mortgage brokerage business and Private Lenders Club™ has no direct dealings with a Private Lenders Club Broker’s client.

QUESTION: Who Uses Private Lenders Club™ Services?

ANSWER: Not everyone qualifies for conventional financing, normally for qualifying reasons such as credit history, too much borrower debt, insufficient income, job history or incomplete documentation. Whatever the reason Private Lenders Club Members will consider the circumstances and depending on the applicant’s type of security and their equity in that security a Private Lenders Club Member could possibly provide a financial solution for an applicant.

Sometimes individuals prefer to arrange private financing for reasons of privacy. For example, some people would prefer to buy a recreational property with private funds vs. institutional financing. They simply do not want their financial institution to know about all of their financial dealings.

Another situation that often arises where Private Lenders Club Members are sought out involves the sale/purchase of a mortgage. Many sales involve seller financing. However, as time goes by there are a variety of reasons why the mortgagee might now prefer to forego a monthly income stream in favor of a discounted cash out.

QUESTION: What If I Have A Self Directed RRSP?

ANSWER: Normally, a self directed RRSP (RRIF, LIRA or LRIF) can be used to fund a mortgage but you should confirm this with your Trustee. You should also get an opinion from an accountant or a tax consultant as to what the tax implications would be.

In general, there are two self directed mortgage scenarios. On the one hand, you could have your RRSP fund a first or second mortgage on a residential property (either personal or rental), refinance an existing property or refinance renovations. Equity takeouts for investment, debt consolidation or consumer purchase are allowed but only by a first mortgage RRSP funding. The aforementioned, however, are considered non arms-length transactions requiring that you provide either CMHC or G.E. Capital mortgage insurance coverage. This insurance coverage premium would be payable regardless of the loan to value (LTV) ratio.

On the other hand, you could have your RRSP (RRIF, LIRA or LRIF) fund someone else’s mortgage and there would be no CMHC or G.E. Capital premium payable.

With the proper counsel this could prove to be a prudent investment.

QUESTION: What Can You Do With $ 10,000.00?

ANSWER: The minimum Broker Funding Request amount is $ 10,000.00. Therefore, when a Broker Funding Request for $10,000.00 is submitted the PLCAdministrator will notify those Members registered in the $ 10,000.00 to $ 20,000.00 category that a Broker Funding Request has been submitted and invite them to review and consider the request.