Secure Your Dream Home with a Private Mortgage in Oakville and Mississauga

Borrowers sometimes seek out private mortgages from private lenders as an alternate source of funding when a traditional bank or lending institution rejects them for a mortgage or a home refinancing loan. They often have periods of six months to three years and are short-term, interest-only loans.

Private lenders are aware that banks and other traditional lending organizations have too rigid lending policies and regularly turn down applicants who are more than capable of repaying their mortgages. Contrary to banks, private lenders prioritize the property’s value and general condition over the borrower’s credit and income. Private lenders also do not demand as much documentation as traditional banks.

Private mortgage lenders are known as “B lenders” and provide loans to borrowers who might not be eligible for standard bank financing. Compared to conventional lenders, B lenders often have stricter terms and higher interest rates. The fixed rates will still be lower than those of a private sector mortgage, making them an attractive alternative for borrowers with less-than-perfect credit or income.

Several credit unions and trust companies are examples of B lenders. If a B lender declined them owing to a significant credit issue, the borrower would turn to one of the numerous private mortgage lenders.

A private mortgage is the ideal short-term solution for someone who nearly meets the requirements for a B lender but may need some time to either improve their credit, accumulate a larger down payment, or increase their income and net worth. In this case, private is preferred.