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Private Mortgages Offer Homeowners Alternate Source of Funds

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Private Mortgages for Oshawa Homeowners

 
Most mortgages in Canada are held by major financial institutions, so many people are unaware of the role of private lenders in our system. If you are finding it difficult to work with a bank to access the equity in your home, you should consider a private mortgage. What is a private mortgage? A private mortgage varies from a mortgage from the bank in these key areas:
  • Risk. A private lender is usually willing to take on greater risk than banks. Banks in Canada are strictly regulated and have stringent criteria regarding loans and mortgages. If the numbers don’t add up, it’s likely that a bank will refuse your mortgage application. Private lenders, on the other hand, have much more flexibility. Private lenders are more willing to look at the big picture and personalities involved and are less reliant on credit reports. If you have equity in your home, it’s likely that you’ll be able to obtain a private mortgage.
  • Customization. Banks have certain products available and their employees slot customers into categories. On the other hand, a private mortgage broker, the borrower and the lender can create a customized plan that works well for all parties.
  • Time. Private mortgages tend to happen much more quickly than mortgages obtained from large financial institutions. This can be a bonus for a borrower who needs funds quickly, but it also means that the borrower must be quick to accept an offer if he/she wants to take advantage of it, or the lender may choose another candidate. Loan processing and funds release usually happen within 5- 10 days  --  and approvals can happen very quickly, sometimes within 24-48 hours.
  • Period. The period of a private mortgage is generally much shorter than that found in conventional mortgages, which can last decades. Typical terms range from one to three years.
  • Interest. Because the lender is assuming more risk, that individual or organization almost always charges higher interest than conventional lending institutions. The difference can vary, so be sure to research private mortgage rates online to ensure that your lender is operating within an acceptable range.
  • Fees. Additional loan processing fees over and above the interest payments can be expected. In addition, in order to obtain a private mortgage, you’ll have to work through a licensed private mortgage broker, who may also charge a fee.

Why Choose a Private Mortgage?

 
There are many reasons why a private mortgage may be the best choice for you. You may have a bad credit history, for example, or you may be in arrears with your current mortgage, tax bill or credit cards. You may be self-employed or have an unverifiable income, situations that conventional banks are not easily able to deal with. Or, you may want to access money sooner than a bank can manage.
 
If you think a private mortgage may be the right choice for you, talk to a private mortgage broker. Initial consultations are usually free of charge. These licensed professionals can help you put together an attractive package and can match you with the perfect lender to get you the funds you need.

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