Pay Dirt Series – Short Term Solutions not Long Time Borrowers

If there is one great divide between MICs and Banks, it’s the expected life of the mortgage.

It has been said that MICs should be short term solutions for acute cash problems, not long term debt or the enabling of chronic financial problems.

This is exactly why MIC’s always want to know what the exit is as a part of the application (and banks NEVER ask this question).  MICs want to be paid out in a year or 2.  Banks want to keep the borrower paying forever.  Why?

Simply put, people should be using MIC money to solve a problem.  It’s more expensive money, so they should be with MICs for as short a time as possible to minimize their costs.  In a sense it’s a bridge to get people through a problem and give them time to sort out their matters and then get back to a bank.

Philosophically, MICs exist to help people financially where that help isn’t available from a bank.  So when your MIC lender insists on knowing what the exit is, show the lender how this MIC financing will get the borrower back on track.