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How to Get a Private Mortgage in Canada

Private mortgage lenders can be individuals or institutions who can be thought of as angel investors – they come to your rescue when regular financing options are not feasible. These lenders offer short term asset backed loans for the purchase of property. Many individuals and businesses in Canada take out mortgages from private mortgage lenders Canada. They are great alternatives to regular financing options in many situations.

When are Private Mortgage Lenders a Good Option

Below are some illustrative situations where taking mortgages from private lenders can be a suitable option:

  • You are trying to buy an unconventional property that a bank or another lending institution is not ready to finance.
  • You need a short term loan for only a few years.
  • You need quick financing without having to wait for long approval processes.
  • You have a bad credit history, and are being repeatedly turned down by regular lenders for a mortgage.
  • You have unverifiable income and this is proving to be a roadblock in getting a mortgage for your dream home or any other property.

Who are Private Mortgage Lenders

Private mortgage lenders are individuals or organizations who wish to invest their surplus cash for short terms to make profits from private mortgage loans. They lend money for property purchases secured by the property as the collateral. Many private lenders have their own investment philosophies like some prefer residential mortgage investments, while others prefer funding commercial properties. They also usually prefer investing in a particular region, which is close to their residence or operations. To reach out to appropriate private mortgage lenders Canada, who are suited for your situation, it’s best to seek help from a well connected and knowledgeable mortgage broker.

Private mortgage lenders look beyond bad credit histories and numbers, and try and assess each case individually as a potential investment opportunity. Some private lenders even like to meet the borrowers in person to assess suitability for their investment. They usually charge a higher rate of interest, but the process of getting a loan from them is much faster and easier.

How are the Terms Set by Private Lenders Different from Other Lenders

  • Private mortgages are generally given out for much shorter periods than conventional mortgages, which can last decades. Typical terms range from 6 months to 3 years.
  • Interest rates offered are higher than those of conventional mortgages.
  • Additional loan processing fees over and above the interest payments can be expected.
  • Loan processing and funds release usually takes around 2-3 weeks, and approvals can come in as brief periods as a couple of days.

Intermediary professional help is advisable when you are taking out private mortgages. Experienced mortgage brokers can get you in touch with reliable private mortgage lenders Canada, and can even facilitate the private mortgage agreements as appropriate legal and binding contracts. This can relieve you of a great deal of worry and hassle involved in both finding and selecting a suitable and reliable private lender.