Private Mortgages

Find alternative loan options that work for you

A private mortgage is a short-term, interest-only loan to buy property. Private mortgages are offered by independent individuals or institutions, so it may be easier to qualify for one. Most Canadians require a mortgage to buy a home. But the process of getting approved for a mortgage isn’t easy. You need to be in good financial health and meet requirements for income, debt, and credit score. So, what happens if you aren’t? In some cases, a private mortgage could be an alternative that will help you achieve your home ownership goals.

Important considerations

Your timeline

Going through a private lender will speed up the process compared to a traditional mortgage.

Length of ownership

Private mortgages are best for short-term scenarios.

Higher interest rates

You will likely need to pay higher interest rates on private mortgages.

Ability to make payments

There are harsh implications if you get behind on payments. Private mortgage lenders will foreclose on a home more quickly than a bank.

Frequently Asked Questions

How do I find private lenders?

Are there alternatives to private mortgages?

How do I get a private mortgage?

Why go private?

Working with a private lender is a good idea if:

You have poor credit history

You don’t have time to go through the traditional process

You are purchasing an unconventional property

You’re a newcomer to Canada and cannot meet standards of other lenders

When should I get a private mortgage?

Private mortgages are not always ideal and require careful consideration.

Pros of private mortgages:

Faster approval process

Suitable for people with poor or little credit history

Open to people who don’t have traditional sources of income

Cons of private mortgages:

Higher interest rates

Additional fees for setup and commissions

Interest-only payments don’t help you pay down your mortgage

Private lenders are not licensed, so you can’t be sure if they have the same education, experience and suitability requirements as licensed mortgage professionals

Harsh implications for not making payments

Why work with a mortgage broker to get a private mortgage?

Knowledge of lenders

A mortgage broker can help you find reputable lenders who are likely to work with you.

Peace of mind

Seeking a private mortgage can be stressful. Working with someone you can trust to help you navigate the process lets you rest assured you are making the best possible decision for the short- and long-term.

Understand all your options

A mortgage broker can listen to your needs and help you properly assess all available options to achieve your homeownership goals.

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