14 Nov 2019 Private Mortgages
What Is a private mortgage?
Private mortgages are loans provided by lenders outside of Canada’s traditional banks. Generally, private lenders are small companies or individuals who provide short-term, interest only mortgages to borrowers as an alternate to Canadian banks. As opposed to banks who look primarily at credit score, private lenders’ central focus is a property’s value, helping qualify many individuals the banks won’t.
Differences Between Private Lenders and Bank Mortgages
Usually 1 Year
1 Year - 5 Year terms
1st Mortgage - 3.89%
2nd Mortgage - 6.99%
1st Mortgage - 2.79%
2nd Mortgage - Prime
Principal + Interest
Minimal – usually just a property appraisal
Significant + property appraisal
Registering A Mortgage
How Much Can I Get as A Percentage of My Home Value (LTV)
Up to 90%
Based on the Stress Test:
- Max 80% on Refinancing
- 65-75% on HELOCS
How Quick Can I Get my Money?
As quick as 48 Hours
Typically, 1-2 Weeks
Should I Get a Private Mortgage or Bank Mortgage?
Private lending is an attractive financing route in several situations. Generally, if you have an existing relationship with a bank it’s worth exploring your options through them. If you find yourself in any of the following situations, private lending may be best for your personal circumstance.
About Rateco Private Mortgages
If you are ineligible for bank financing, Rateco is happy to help. We pride ourselves on our borrower-first mentality providing complete transparency and honestly throughout your Rateco experience.
The Rateco reverse-auction enables private lenders to bid against one another to service your private mortgage. Borrowers have total choice and control over who they chose to work with, forcing lenders to provide their most competitive interest rates to you to win your business. Best of all, there’s absolutely no cost to you, the borrower, until your private mortgage has been funded. We’re happy to work on your behalf, risk free.