Private mortgage financing is an option for those who may have had difficulty securing a traditional home loan. Private mortgage lenders serve borrowers who may fail to qualify under the criteria of conventional mortgage lenders.
Private Mortgages are not really different from conventional mortgages. It's the private mortgage lenders who are different. Private mortgage companies work with borrowers for whom conventional mortgage financing may not be an option. Private lenders have different criteria suitable for borrowers in the following circumstances:
Poor Credit HistoryA private lender may demonstrate more flexibility in underwriting criteria. Those seeking a bad credit mortgage should consider one of the many Canadian private lenders that partner with Canadawide Mortgages Ltd.
Self-employedThe self-employed often get better service from Private Mortgage lenders. Ontario, for example, is filled with entrepreneurs who may earn enough to finance a home, but have gaps or inconsistencies in their financial history that scare traditional lenders.
High Risk PropertiesTraditional lenders might be reluctant to lend outside of established neighbourhoods while private mortgage companies look at properties individually to assess value.
Bridge financingmay be needed if you buy a new home before selling your old home. Private lenders are more likely to provide bridge financing than traditional lenders.
Debt consolidation Many turn to their home equity for debt consolidation. Private mortgages may be easier to obtain to consolidate debt. Private lenders tend to be more accommodating for this than traditional lenders.
Second mortgages If you are seeking to consolidate debt or finance home improvements, a private second mortgage may offer preferable terms or a private lender may offer more relaxed underwriting criteria.