Private Mortgage Lenders in Canada

private lenders in canada

Private Mortgage Lenders Help Canadians Get Home Loans

In recent years the Canadian government has made it harder to qualify for home loans – it’s no secret. Whether applying for a new mortgage to buy a home, or a second mortgage on existing home, tight requirements have left many people out in the cold.

Private mortgage lenders can help Canadians who don’t qualify at the bank. With a private lender, you can get around the stringent mortgage approval requirements placed on borrowers. Here’s what you need to know about private mortgage lenders.

What are Private Mortgage Loans?

private loanPrivate mortgage loans are those offered by individuals or corporations who lend money, rather than the big banks. The big banks have more red tape to go through because they receive government approval for their lending. Private mortgage lenders don’t have to worry about that because they don’t operate based on the goodwill of the Canadian government.

In many cases, the lending criteria used by the big banks and other conventional lenders doesn’t allow for special circumstances. Contrary to what traditional lenders would have you think, you can have bad credit and still have financing options available to you.  Essentially, there are people who could, in fact, pay back their loans — even if their applications don’t fit into a neat little box.

Private mortgage loans can fill the void and provide funding to those who might not get it otherwise. Rather than only looking at your credit history, private lenders are inclined to look at the overall value and marketability of the property in question. They make loans that are often short-term in nature, often with terms ranging from one to three years.

In addition to offering funding access, private mortgages often come with a faster approval and financing process. Private mortgage lenders can arrange both a 1st mortgage and a second mortgage quickly – with little to no documentation.

Who Should Turn to Private Mortgage Lenders?

There are several situations in which a private lender can help you get the funding you need. Here are some circumstances that private mortgage lenders can help with:

  • Conventional lenders turn you away due to credit problems or a thin credit file
  • You need quick financing, and can’t wait for a longer approval process
  • Your income is from nontraditional sources and can’t be easily confirmed by conventional lenders
  • A second mortgage would help you consolidate debt and get back on your feet, but your debt-to-income ratio is too high for a conventional lender
  • The property you want to purchase isn’t attractive to a bank or conventional lender
  • You owe or are facing Revenue Canada liens and need to clear them up
  • You prefer a short-term loan
  • Bridge financing is required
  • You have property tax arrears
  • Your mortgage payments are behind

For the most part, private mortgage lenders provide solutions to those who might otherwise be shut out of the system — even though they can make payments. For the most part, they lend based on the amount of equity you have, not your credit or source of income.

What Can You Expect with Private Mortgage Lenders?

private lenderWhen working with a private mortgage lender, you can expect to pay slightly higher interest rates than with conventional lenders. However, if you need the funding, it can be worth it to pay a higher interest rate.

For example, if you want a 2nd mortgage for debt consolidation, and you can’t get a big bank to approve you, a private lender can help you. You might pay a moderate amount more than you would at a bank on a private second mortgage, but that’s still much lower than the high-interest debt, ranging from 17% APR to 25% APR, that you might be consolidating.

Additionally, when you’re facing foreclosure or Revenue Canada judgments, getting a fast loan through a private mortgage lender can make a lot of sense, even if you’re paying a rate that’s a little higher. You can consolidate debt that may not even qualify for bankruptcy protection and save your house from a forced sale.

If you’re looking for a private lender to purchase real estate or leverage equity, can help. As a mortgage brokerage, we have access to Canada’s largest network of private mortgage lenders. Our lending partners are willing to pay more attention to the actual merits of your situation, rather than relying on your credit score or source of income.

The Bottom Line

Private mortgage lenders can be a big help to many homeowners and potential home buyers. Many who might not fit the narrow definition of “creditworthy” held by the big banks and conventional mortgage lenders. Rather than using a stringent set of criteria, private lenders take on a “big picture” view of the situation. Ultimately, they focus more on the value of the property than your credit score or income.

If you’re trying to buy a home or secure a private 2nd mortgage, can help. We have more options available to us than other mortgage brokers. We never have to rely on traditional mortgage lenders like the big banks, we work with alternative lenders.

To sum up, we specialize in arranging challenging mortgages and pride ourselves on championing consumers who really help.  Regardless, of the type of mortgage you are looking for, can find a solution. Call for a free consultation to discuss private mortgage options at 1-855-668-3074 or apply online and let us get working on your approval today.

Note: please click here for important information about mortgage deferrals during the COVID-19 pandemic.