Traditional lenders said no—or you need financing quickly for a unique situation? Private mortgages might be the solution. Here's when they make sense and what to watch for. What Is a Private Mortgage? A private mortgage is a loan from an individual or private company rather than a bank or traditional lender. They're used when conventional financing isn't available or practical. Common Scenarios for Private Mortgages Credit challenges: Bankruptcies, consumer proposals, poor credit Income verification issues: Self-employed with complex income Property issues: Unique properties banks won't finance Bridge financing: Short-term needs between transactions Quick closing needed: Faster than traditional lenders (sometimes days) How They Differ from Traditional Mortgages Private Interest Rate 4-7% 8-15% Term Length 1-5 years 6-24 months Qualification Strict Flexible Approval Speed 2-4 weeks Days Fees Lower Higher Need Financing When Banks Say No? Explore private lending options. We only recommend private when it genuinely helps your situation. Costs to Expect Private mortgages come with higher costs: Lender fees: 1-3% of loan amount Broker fees: Often paid by borrower Legal fees: May be higher Interest rates: Significantly higher than banks These costs are justified when private financing solves a real problem—but be clear on the total cost. Exit Strategy Is Critical Private mortgages are short-term solutions. You need a clear plan to: Refinance to traditional lender – Most common exit Sell the property – If that's your plan anyway Pay off the mortgage – If funds become available Without an exit strategy, you risk renewal at even higher rates. Protecting Yourself When considering private lending: Work with an experienced broker – We know reputable private lenders Understand all fees upfront – No surprises at closing Have a clear exit strategy – Don't get trapped in high rates Get independent legal advice – Protect your interests Know your rights – Private borrowers have protections When It Makes Sense Despite higher costs, private mortgages can be valuable: Preserve your home from power of sale Complete a purchase when timing is tight Bridge a credit repair period Finance properties banks won't Access equity when traditional lenders refuse What's Next Explore private lending options if traditional lenders aren't working for your situation. We'll ensure you understand the full picture and only recommend private when it's genuinely in your interest. Ready to Get Started? Contact us today for personalized mortgage advice and competitive rates. Get Pre-Approved Call (416) 822-7357 Frequently Asked Questions What Is a Private Mortgage? A private mortgage is a loan from an individual or private company rather than a bank or traditional lender. They're used when conventional financing isn't available or practical. Need Financing When Banks Say No? Explore private lending options. We only recommend private when it genuinely helps your situation. Q: Are private lenders legitimate? A: Yes, when working through proper channels. We only work with reputable, licensed private lenders. Q: How quickly can I get a private mortgage? A: Often within days for simple deals. Urgency is a common reason people use private lenders. Q: Can I renew a private mortgage? A: Usually, but the goal should be to exit to traditional financing or sell. Repeated renewals are costly. Q: What's the maximum I can borrow privately? A: Private lenders often go to higher LTV (loan-to-value) than banks, sometimes 80-85%.
