Private Mortgages Ontario
Private Mortgages in Ontario are short- term, interest-only loans, ranging in length from 1 to 3 years. Interest only loans do not require homeowners to pay the mortgage principal down, and instead only require interest payments each month.
What are Private Mortgage Lenders Guidelines?
- No Credit Score required
- No Employment Proof required
- Credit report doesn’t matter.
- Bankruptcy and Consumer Proposal’s are fine.
As you can see above, a Private Mortgage Lender has very loose guidelines, the reason is because Private Lenders, lend based on Equity. All that matters to them is amount of equity you have. We have a Private Mortgage Calculator below which you can use to see how much you would qualify.
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Why would I use a private mortgage lender?
- You want to purchase an unconventional property that a prime lender or bank won’t finance.
- You need fast financing and don’t want to wait for a long approval process.
- Your bad credit history means you are being turned down by conventional lenders.
- You only need a short term loan.
- You have nonconfirmable income that is preventing you from obtaining a traditional mortgage.
Who are the Private Lenders in Ontario?
- Mortgage Investment Corporations (MIC’s) – Usually a pool of investors lending money.
- Trust Companies – Often backed by one or two big investors.
- Investors – Funds a lot of small mortgages, are usually people looking to diversify their investments.
What Interest Rate would I get?
Most Private Mortgage Lenders charge Interest rate from 5.99% to 14.99%. Often called as risk based pricing is analyzed with a lot of factors
- Equity – The higher the combined (First Mortgage + Second Mortgage) Loan to Value, higher the pricing.
- Credit Report – Some lender’s do look at credit report to assess their risk
- Repayability – Every lender want’s their investment back, sources of income can also be a factor
How much are the fees for Private Mortgages?
Conventional A(ScotiaBank, MCap, TD) lender’s pay our Brokers commission for bringing them an AAA Client, hence there is no fees with A lenders.
Private Lenders doesn’t pay any commission to brokers, hence our brokers often charge a flat fee or a % fee to cover all our costs. We charge the lowest fee among other brokers. Private lenders often charge a fee as well, fortunately, all these fees can be capped (added) to the mortgage.
For Eg: You need $100,000 Private Mortgage, all the fees come to $2,000. We will issue a $102,000 Mortgage to cover all the fees & cost.