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
- 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
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.
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.
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.
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.
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
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.