What is a private mortgage?

What is a private mortgage?


In the fast pace world of real estate,  where decisions need to be made quickly and with crtainity, a private mortgage can help in enuring you are able to purchase the house of your dreams where all other means fail.

But what is a private mortgage? Private mortgages can be defined as transactions taking place between borrowers (who want to buy a property) from private lenders. Generally, private mortgages have different criteria from traditional mortgages and the interest rate is also on the higher side.

In recent years, many banks have tightened their rules and regulations regarding money lending and that is why more and more customers are going towards working with private money lenders so they can have access to quick funds and loans with low turnaround times. 

Private mortgage can be tailored to your specific requirements and all the paperwork would be taken care of by our team members. All you have to do is pick up that phone and call us today or apply online to get the process stared. Our mortgage broker has the required knowledge and skills to secure you a private mortgage, and will be more than happy to help you with your financial requirements.  We serve customers in Toronto and the surrounding areas


A little bit about private lending

Putting it simply, private or hard money lending is nothing but a short term loan secured by real estate.  You can discuss your funding requirements with our experienced Toronto Mortgage Broker and we can draw out a customized plan which meets all your needs at an affordable interest rate. The term period is generally between 6 to 24 months, however, depending on the mortgage amount you can be extended for a long period of time. 

Please note that when you compare private mortgage interest rates with that of traditional institutions such as banks, you may find the rate are different. But not to worry, this is where our experienced Toronto Mortgage Broker comes in to help. When you deal with us, you would be connecting with a professional in this line of business who will go through every detail and then present you with a tailored mortgage plan which can work within your financial means and not exceed your budget and you can re-pay the mortgage comfortably within a given period of time. 

Complete transparency has always been a part of our ethics, and we will see to it that you as your our client has a full understanding of the mortgage contract before you sign on the dotted lines. Our Toronto Mortgage Broker is always available to help you resolve any inqueries regarding your mortgage-related matters. So you don’t have to wait around, you can pick up the phone and speak with us today!


When should you opt for a Private Mortgage in Toronto?

If you are looking for short-term mortgage loans, the private mortgages are one of the best options available on the market. You will have quick access to the necessary funds that you can use to buy a residential property. Other than that the funds can be used for all and any purposes you see fit; such as paying off bad loans, debts, credit card bills etc. Typical situations when you should opt for a private mortgage could be:

  • If you are opting for constructions and land loans
  • If you have a low credit score and are facing problems in acquiring a traditional loan
  • Interim financing
  • If you want quick access to funds

Also, have a look at the list below. These are the types of properties you can get a private mortgage for:

  • Single and multi-family residential properties
  • Commercial properties
  • Agricultural land
  • Vacant land

We cover all aspects of this line of trade. Our interest rates are extremely competitive and you can compare them with the current market standards. Since we started our operation customer satisfaction has always been our top-most priority. Find out for yourself  by contacting us today!


What are the qualifying criteria?

Unlike traditional loans where credit scores play a very crucial role, private mortgage lenders look into the home equity. The more equity you have invested in your property the better terms you can get. Credit and employment are not as critical as the banks and other lenders require. You would just have to prove that you have the resources to pay off the loan in time and be able to close the mortgage without any issues.

You will always have the option to plan your exit strategy. If this is a new term to you let us explain what an exit strategy is. In an exit strategy, you can plan how you will pay back your loan by the end of the term.

Here are some exit strategy examples

  • You renovate and then sell your property
  • You pay off the loan using your inheritance 
  • Your credit scores improve and you qualify for traditional banking
  • Qualify for construction financing
  • Refinance your mortgage 

It is important that you clearly state what your financial requirements are so we can help you accordingly.


How a private mortgage can help you?

Private mortgage loans also known as ‘hard money’ loans and they have their fair share of advantages. Here’s a list that can help you better understand what these advantages are to you when you opt for a private mortgage. Have a look below:


  • It’s the ideal option for homeowners who are not eligible for traditional loans due to low credit score or are self-employed or have bad debts. This type of loan has a fast processing time, so you will get the funds as quickly as possible.
  • It’s a great investment if you are planning to sell your property in the future. You can renovate your property and then sell it again and pre-close the loan. These loans make are ideal properties where extensive renovation work is needed. 
  • You can use your private mortgage funds to pay off your bad debs and credit bills quickly, which in-return can improve your credit score. 


Some cons now!

When you are reading about the benefits we think it’s only right that you get to understand what you are getting into and look at the other side. Read on

  • High-interest rates: The private mortgage rates range between 7-14% which is more than what the banks offer
  • Short payback period: There will be a set period in which you will have to pay back the whole amount and generally it’s between 6-24 months
  • Also, your taxes can be affected

But not to worry,  when you work with our Toronto Mortgage Broker, we will be there every step of the way throughout the process so you face no problem at all.  Our Toronto Mortgage Broker looks forward to serving you. Request a callback today! Our services are available to clients living in and around Toronto

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Toronto Mortgage Broker- Rumy Gill can help with Bank Mortgages, Alternate Lender Mortgage, Second Mortgage Toronto & Private Mortgage in Canada

Call (647-464-3939) to Schedule your personal and confidential appointment Today!

Head Office: 200-111 Gordon Baker Rd, Toronto, ON, M2H 3R1, Canada