Private Mortgages

Published on 29 August 2022, 07:22:56 AM

Have you been turned down by a bank or credit union? Do you need to consolidate your debts to get a mortgage loan? 

No credit or bad credit is no reason to lose a home or investment property you plan  to buy. High risk mortgages, second mortgages and renovation loans can all be financed by private lenders.

You could qualify for a private mortgage, short-term interest-only loan of up to 85% of the equity in your home or land, even if you have a low credit score or can’t get a bank loan because of debt. 

As long as your land or property has value and can be resold if necessary, a private mortgage can be the right solution for your home buying borrowing needs. Axess Law’s Greater Toronto Area real estate lawyers can help. We draft the legal documents you need to make home buying dreams a reality.  

Why Get a Private Mortgage?

• To pay off a car loan or credit line by refinancing your home.
• To get short-term loans for vacations or renovations.
• To finance a business or job training. 
• To buy income properties or make unconventional investments.
• If you are rejected because you are self-employed or your income comes from bonuses or tips.
• To sell your home, instead of letting the bank foreclose because you can’t make the mortgage payments.
• If your credit score is low.

How Private Mortgages Work

When you apply for a private mortgage, you expect to pay more. Interest rates and fees are higher and loan terms may be shorter. 

Private lenders are a last resort if conventional mortgage loans or consumer credit are unavailable. Your loan may be for six months to three years, giving you time to fix your credit score or qualify for longer-term bank or credit union financing. 

Amortizations can go up to 35 years for second mortgages.

Qualifying and funding are quicker, usually in days to weeks. Private lenders can lend more freely because they aren’t federally regulated like banks and credit unions. That means you don’t have safeguards like somewhere to complain if you disagree with borrowing terms, but you also aren’t restricted by lending rules and regulations.

Your income doesn’t matter, just the equity in your home. Your property must be marketable, in case you default and the lender needs to realize its security. And urban properties are preferred, because they sell quicker.

Payments may be interest only, with no principal pay down. 

Interest rates are high, ranging from 6% to 18%. But your rate may go down if you make payments on time.

Getting a Private Mortgage in Ontario

Most Ontario mortgage brokers deal with banks and credit unions. You may have to look on Google to find private lenders who arrange GTA mortgages. Check the Internet for:

Individual Lenders

Private investors who lend their own money to get higher returns than GICs or bonds can deliver. Friends or family can be reliable sources for lower-interest loans.

Mortgage Investment Corporations

Investment groups that pool their money to fund individual mortgages.

Syndicated Mortgage Corporations

Mortgage syndicates that invest in commercial projects like condos or rental units. They may be interested in you if your unit is in a project they are funding.

Axess Law’s licensed real estate lawyers recommend checking Better Business Bureau (BBB) online reviews before choosing any private lender.

What Qualifies for a Private Mortgage

Private lenders mortgage properties banks or credit unions reject. You could qualify for mortgage loans for:

• commercial properties 
• warehouses
• land
• cottages or rural homes
• prefab or modular homes
• mobile homes
• foreclosures
• homes damaged by flood or fire. 

Bring recent property assessments or realtor valuations when you meet with private lenders. Your property must be in good condition to be considered. 

Private Mortgage Fees and Penalties 

Broker fees or charges to set up a private mortgage average 1% to 3% of the loan value. Your fees can be added to your loan amount. 

Since private lenders value investment returns, late payments or NSF’s may trigger other fees or penalties. If you default and the lender forecloses, you can lose your home. 

Axess Law can advise you if a private mortgage goes wrong. Ask us about demand letters, Small Claims Court and other civil remedies to your legal woes.

Private Mortgages and Future Loans

Private lenders often don’t check credit scores. They’re interested in the equity in your home, not your income or credit history. Making payments regularly and on time for private loans can improve your credit score when you approach banks or credit unions in future. 

Why You Need a Lawyer for a Private Mortgage

Axess Law finalizes private mortgage agreements. 

We can’t advise you whether to apply for a private mortgage. But if you do use a private lender or borrow from family or friends, we can register the mortgage against the property for you.

Our Greater Toronto Area mortgage attorneys answer any questions you have about private mortgages so you can take the next steps with confidence and peace of mind. We do title searches and check for zoning restrictions, property or construction liens and outstanding taxes. 

We have real estate lawyers nearby and can video conference online anywhere in Ontario.

Book Mortgage Appointments Online

Call our 1-647-479-0118 lawyer line or use our convenient online booking form to make an appointment.

We will set a date for you to come into one of our open daily locations to sign your closing documents or we can send someone to your home or office to finalize mortgage documents for any real estate transaction. We’re open 7 days a week with long hours, so you can choose a time that works for your schedule.

We let you know when your refinance is complete and you’re on your way. It’s just that simple.

No credit or bad credit is no reason to lose a home or investment property you plan  to buy. High risk mortgages, second mortgages and renovation loans can all be financed by private lenders.

You could qualify for a private mortgage, short-term interest-only loan of up to 85% of the equity in your home or land, even if you have a low credit score or can’t get a bank loan because of debt. 

As long as your land or property has value and can be resold if necessary, a private mortgage can be the right solution for your home buying borrowing needs. Axess Law’s Greater Toronto Area real estate lawyers can help. We draft the legal documents you need to make home buying dreams a reality.  

Why Get a Private Mortgage?

• To pay off a car loan or credit line by refinancing your home.
• To get short-term loans for vacations or renovations.
• To finance a business or job training. 
• To buy income properties or make unconventional investments.
• If you are rejected because you are self-employed or your income comes from bonuses or tips.
• To sell your home, instead of letting the bank foreclose because you can’t make the mortgage payments.
• If your credit score is low.

How Private Mortgages Work

When you apply for a private mortgage, you expect to pay more. Interest rates and fees are higher and loan terms may be shorter. 

Private lenders are a last resort if conventional mortgage loans or consumer credit are unavailable. Your loan may be for six months to three years, giving you time to fix your credit score or qualify for longer-term bank or credit union financing. 

Amortizations can go up to 35 years for second mortgages.

Qualifying and funding are quicker, usually in days to weeks. Private lenders can lend more freely because they aren’t federally regulated like banks and credit unions. That means you don’t have safeguards like somewhere to complain if you disagree with borrowing terms, but you also aren’t restricted by lending rules and regulations.

Your income doesn’t matter, just the equity in your home. Your property must be marketable, in case you default and the lender needs to realize its security. And urban properties are preferred, because they sell quicker.

Payments may be interest only, with no principal pay down. 

Interest rates are high, ranging from 6% to 18%. But your rate may go down if you make payments on time.

Getting a Private Mortgage in Ontario

Most Ontario mortgage brokers deal with banks and credit unions. You may have to look on Google to find private lenders who arrange GTA mortgages. Check the Internet for:

Individual Lenders

Private investors who lend their own money to get higher returns than GICs or bonds can deliver. Friends or family can be reliable sources for lower-interest loans.

Mortgage Investment Corporations

Investment groups that pool their money to fund individual mortgages.

Syndicated Mortgage Corporations

Mortgage syndicates that invest in commercial projects like condos or rental units. They may be interested in you if your unit is in a project they are funding.

Axess Law’s licensed real estate lawyers recommend checking Better Business Bureau (BBB) online reviews before choosing any private lender.

What Qualifies for a Private Mortgage

Private lenders mortgage properties banks or credit unions reject. You could qualify for mortgage loans for:

• commercial properties 
• warehouses
• land
• cottages or rural homes
• prefab or modular homes
• mobile homes
• foreclosures
• homes damaged by flood or fire. 

Bring recent property assessments or realtor valuations when you meet with private lenders. Your property must be in good condition to be considered. 

Private Mortgage Fees and Penalties 

Broker fees or charges to set up a private mortgage average 1% to 3% of the loan value. Your fees can be added to your loan amount. 

Since private lenders value investment returns, late payments or NSF’s may trigger other fees or penalties. If you default and the lender forecloses, you can lose your home. 

Axess Law can advise you if a private mortgage goes wrong. Ask us about demand letters, Small Claims Court and other civil remedies to your legal woes.

Private Mortgages and Future Loans

Private lenders often don’t check credit scores. They’re interested in the equity in your home, not your income or credit history. Making payments regularly and on time for private loans can improve your credit score when you approach banks or credit unions in future. 

Why You Need a Lawyer for a Private Mortgage

Axess Law finalizes private mortgage agreements. 

We can’t advise you whether to apply for a private mortgage. But if you do use a private lender or borrow from family or friends, we can register the mortgage against the property for you.

Our Greater Toronto Area mortgage attorneys answer any questions you have about private mortgages so you can take the next steps with confidence and peace of mind. We do title searches and check for zoning restrictions, property or construction liens and outstanding taxes. 

We have real estate lawyers nearby and can video conference online anywhere in Ontario.

Book Mortgage Appointments Online

Call our 1-647-479-0118 lawyer line or use our convenient online booking form to make an appointment.

We will set a date for you to come into one of our open daily locations to sign your closing documents or we can send someone to your home or office to finalize mortgage documents for any real estate transaction. We’re open 7 days a week with long hours, so you can choose a time that works for your schedule.

We let you know when your refinance is complete and you’re on your way. It’s just that simple.