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What is a Private Mortgage?
A private mortgage is a short-term loan that uses your home as collateral. Generally the term on a private mortgage usually ranges from 1 to 3 years. Private mortgages can be a good option for homeowners. Especially, if you don’t qualify with conventional lenders.
To qualify for a mortgage loan with a big bank it can be difficult. In addition to looking at your credit score, major banks want to verify income and see quality real estate. As a result, private mortgage lenders have become a necessity.
A private lender for mortgage doesn’t care about poor credit scores. Generally speaking, they don’t even look at your income. Their primary concern is the amount of equity in your home. Traditional private lenders will typically lend up to 80 and in some cases 85% of a home’s value.
Private mortgages fill the void when institutional lenders won’t help. They are a very helpful and flexible option when you don’t qualify with your bank.
Types of Private Mortgage Lenders
There are 3 different types of private mortgage lenders in Canada:
- Private Individual: These types of mortgage lenders are individuals who have a surplus of funds and invest in real estate. In exchange for their investment they get a better return than they likely would if they just had their money sitting in a bank. Overall, they have to feel more comfortable investing in the housing market than the stock market.
- Mortgage Investment Corporations: Likewise, a mortgage investment company (MIC) is a group of individual investors who invest their money with a company. The company then uses this pool of investor money to fund mortgages on a case-by-case basis.
- Syndicated Mortgages: A mortgage syndicate is like a MIC. However, they fund large projects and can be involved in several projects at the same time. For example, they may be used to develop a pair of high-rise condos.
Most mortgage brokers have limited access to private lenders. Specifically, only niche mortgage brokers who focus on private lending do. This means that clients who don’t do their research, don’t get access to the best pricing and have limited products to choose from.
Advantages of a Private Mortgage
Ideally, most people choose big banks for their traditional mortgage needs. However, this isn’t always an option. If you have bad credit or can’t prove your income, a traditional lender is out of the question.
Notably, this is where private mortgage lenders stand out. Private lenders don’t care about poor credit scores or income. Again, their primary concern is the equity in your home.
Another benefit includes quick turn around times. Again, given that there is virtually no paperwork to review, private mortgages can be closed quickly.
Additionally, a private mortgage lender will often consider properties that many bank lenders would otherwise not finance. These types of properties include:
- Commercial Properties
- Vacant Land
- Rural Properties
- Construction Mortgages
- Pre-Fab Construction Homes
- Damaged Homes (water, fire & foundation issues)
Big banks tend to like “cookie cutter” type homes and usually only lend on residential and commercial properties. In general, their focus is on nice properties in urban areas. In contrast, private lenders are more open to challenging property types and they offer a variety of solutions.
What Type of Private Mortgage Options are Available?
For the most part, there are a variety of private mortgage options available to homeowners. They are flexible and can be taken as a short-term mortgage to help get you back on track. Some of these solutions include:
- High Risk Mortgages
- Private 1st Mortgage
- Bad Credit Commercial Mortgage
- Private Construction Financing
- Private 2nd Mortgage
- Bad Credit Home Equity Loans
- Secured Renovation Loans
- Vacant Land Financing
Turnedaway.ca can help with private first mortgage financing and arrange your private second mortgage. We have created access to one of Canada’s largest pool of private mortgage investors and made it readily available to our clients.
Why Choose Turnedaway.ca for your Private Mortgage?
Turnedaway.ca has a seemingly endless pool of private investors. Our lenders offer competitive private mortgage lenders rates and are decisively quick. With our low mortgage rates, our private mortgage solutions are perfect, whether it’s for a debt consolidation, foreclosure or to fee up cash flow.
We aim to pre-screen our private investors which shield our clients from predatory lenders ensuring that all parties benefit from the private mortgage financing.
If you’ve exhausted your efforts at your bank, TurnedAway.ca can help. We facilitate mortgages in every province, excluding Quebec. We have the best private mortgage lenders in Toronto and all other major cities. Our private lenders have virtually no limitations are are able to arrange financing as small as $10,000.
Give Turnedaway.ca a call at 1-855-668-3074 to see if a private mortgage is right for you. Or Apply Online and let us work on getting your approval today!
We’ve helped a lot of people. See what they have to say!
Marilyn & Bob T
We can’t thank you enough for all your help with our mortgage. We were skeptical about filling out an online application but we had tried several banks and due to our credit, couldn’t find anyone to help us. Getting a call within 15 minutes of submitting our application to go over the application put my mind at ease but my husband and I were both shocked to receive a call the same day with an approval. We are still amazed at everything you did considering how difficult the banks made our situation sound. Again, from the bottom of our hearts thank you so much!
Marilyn & Bob T, Whitby Ontario.
Dave & Sharon S
My wife and I felt completely lost and didn’t know where to go after being declined by our bank of 18 years. We were so relieved once you advised us there are still lenders that value a mortgage based on merits other than just your credit rating. We had never missed a payment on our mortgage for 18 years and to hear our bank say they couldn’t help us even though we owed virtually nothing on our home was heartbreaking. We couldn’t be more grateful that you helped out two complete strangers when nobody else would.
Dave & Sharon S, Ottawa Ontario
I can’t put into words how greatful I am to you regarding coordinating all of the activities in seeing my new mortgage go through. There are several reasons for the appreciation from my side but most importantly it will allow my daughter to continue to grow up in a home and neighborhood that she has identified as being very important to her.
I owned a home for almost 15 years and faithfully renewed at my bank every 5 years. About 14 years into my mortgage my job was terminated and I was forced to rely on credit cards to keep things going. Fortunately I found work after 7 long months but by then my credit had deteriorated and my bank wouldn’t help. I called turnedaway.ca after hearing one of their radio ads and I am glad I did. They bailed me out of a bad financial situation, got rid of all my credit card debt and got me down to one manageable mortgage payment.
John C, Toronto Ontario.