If you’re planning to refinance a property or to acquire a commercial property, you have a choice between private lenders and government lending agencies. One of the best types of loans to go for when you’re planning to get a mortgage is a non recourse loan. While this type of loan is offered both by private lenders and the government, there are a few reasons why choosing to have your property financed through a government lender is better. Here are the advantages in choosing government non recourse loans.

Not affected by market volatility

First of all, non recourse loans issued by the government are not easily affected by market volatility. Since the government provides funding for these lending activities, these loans are more readily available and are easier to apply for. Many private lenders limit their lending activities during times of economic recession, and as a result many loan or mortgage applications are declined. Non-recourse financing by the government, on the other hand, is more stable and more secure. Since funding is more readily available, getting the financing you need is often a less complex process.

Lower non recourse loan rates

Compared to private lending, government non-recourse loans tend offer lower rates. Most commercial lenders like banks need to make profits from their financing activities and therefore charge higher rates than public lenders. In contrast, government financial institutions charge lower rates so that more borrowers can take advantage of more affordable financing. Lower rates translate to lower monthly payments. These long range benefits make government loans an attractive option for many borrowers.

Ideal for mortgages

A non recourse loan is normally taken out in the form of a mortgage, since the property serves as the collateral and the borrower does not become personally liable for the debt. A government non-recourse mortgage has a lower interest rate as well, making them more attractive for borrowers. Whether you’re looking to refinance an existing mortgage or to acquire a new property, for profit or non-profit purposes, choosing a government financed or guaranteed loan can be very advantageous.

Quicker approvals

Since government lenders do not exist merely to make profits but also to serve the public, many government non recourse lenders are quick to process and approve loan applications. Most private lenders take weeks or months to process loan applications in order to assess the risk involved in every transaction. These private non-recourse lenders check your credit history and establish your credit worthiness as well. This makes the entire process more intricate compared to a non recourse loan from a government lender. A quicker approval time allows you to start on your project as soon as possible, whether for commercial or non-commercial purposes.

As a borrower you will have two choices when it comes to taking out a non recourse loan. You may choose to go for a private lender or a government agency. Although the choice is ultimately up to you, reviewing these advantages on government non recourse loans will lead you to make a smarter choice in the end.