Use a Private Mortgage the Smart Way

A lot of people are afraid of applying for a private mortgage despite hearing a lot of good things about it and how it can benefit them because they worry that they might mess up and cause more financial issues on their side. That shouldn’t be the case, more so now that there is an increasing interest in getting a private mortgage because not everyone have impeccable credit ratings and can borrow brow traditional lenders.

What is a Private Mortgage and Why Get it

A private mortgage is a type of loan that you can get from a business, institution, or an individual that is not a traditional lender of mortgage. When done correctly, getting a private mortgage will create a win-win scenario for everyone where each party involved gains financially without going through too much risk.

But here’s the thing, we’ll be talking about getting a private mortgage in here from a party that is known to you or known to us. Trying to get one from cold contact is referred to as a hard money loan so we will not be tackling that.

So, why get a private mortgage from private lenders and not try to get a loan from other funding solutions?

Although there are a lot of possible lenders like local credit unions, big banks, online lenders, and their likes, getting a loan from them isn’t as easy as filling up an application form and getting approved.

The go-to lenders often have a lot of qualifying criteria in place such as you being able to provide certain documentation, being a resident for a certain number of years, having a good credit score, being employed for a specified number of years and so on. What if you’re a self-employed individual? Where are you going to get some of these forms? Or how about if you’re a young adult just starting out in life and have no credit score yet to speak of.

When you go the private route, you can save on paying interest and will have better chances of being lent the money that you need.

Issues When Getting a Private Mortgage

You have to keep in mind that even with the best intentions, deals can go awry and some issues will come up. This means that if you know your lender in real life, relationship strain might become an issue when you can’t pay or when they decide to give you higher interest than what you are expecting. This is why having a third party draw up terms can be very beneficial.

Another possibility is you may not get the loan you want because the lender will have to also cover their bases and consider property value fluctuations. This means that if your house is worth $500,000, the amount you’ll be able to borrow would be a lot less than that to account for other scenarios down the road.

Also note that maintaining the house is your responsibility so is checking that the title is good and that all taxes are paid on time. Once you note this and all of the above, you are ready to apply for a private mortgage and draw up private mortgage agreements with the help of a trusted private mortgage broker.

Using a private mortgage has many advantages. If you feel that you’re ready to apply for a private mortgage, don’t hesitate to contact us so we can assist you with getting one and making sure that the terms are what you can handle.

Try An Alternative Funding Source With Private Lending

If you own a business or tried to start one, you know that getting a loan from banks is about as easy as getting an uber to fly you to the moon, more so when your credit history isn’t as spotless as you may want it to be. It seems like no matter how well prepared you are and how nicely drawn your business plans are, financing via a bank loan just isn’t for everyone.

Private Lending as Alternative Funding

Financing via a loan from a private lender is often the best funding option for entrepreneurs who’ve been turned down by banks or is likely to be turned down by traditional lenders. This isn’t because private lenders will just hand over money to anyone who asks, in fact they are often as diligent as banks when checking for your information and credit history; it is just that they aren’t as institutionalised as banks and can look into each application with more consideration.

This is good news for those who want to keep their whole enterprise their own and not take investors in who want control in operations and executive level. A private lender won’t want that. They are usually just concerned with you being able to pay off your loan. That’s why they take risks on business ideas that have a good chance of truly taking off, to begin with.

Should You Get A Loan From A Private Lender?

A private lender is your best bet if you’ve got a realistic business plan that shows good promise backed by statistics and solid feasibility, more so when you can find a private lender that specialises in your business’ niche. Not only will they look into the viability of your proposed venture but can provide you great insights along with giving you a sound repayment plan that you really can pay for. Kind of like getting a mentor or a business fairy godmother.

Get a Private Lender

How do you find the private lender for your niche? You can ask around or get the help of professional brokers who can match you with a private lender that’s likely to give you a loan. This is easier than going through lender after lender trying to get one to take interest in what you’re trying to do.

Know too that there are private lenders that do not really have a niche or a specialty as to whom they give loans to, but have a solid track record of spotting businesses that are bound to succeed. These lenders usually use brokers to help connect them to entrepreneurs in need of capital. The brokers screen the projects and recommend the right private lender to borrow capital from. As such, they make everyone’s life a lot easier.

Thinking about getting in touch with a private lender to get a private mortgage but don’t know how and would want to get assistance from a professional mortgage broker? We’re here to help! Talk to us today! We’ll get in touch as soon as we can!

Must Know Facts About a Private Mortgage

A lot of people are getting interested in applying for a private mortgage but are not sure if getting one will truly be beneficial for them. After all, getting a private mortgage is a big decision and not just something to take on a whim. You’ll want to weigh the disadvantages against the advantages to ensure that you get the most benefits from applying for a private mortgage. Below are more helpful information.

Why Get a Private Mortgage?

Applying for a private mortgage is often one of the best options for people who may not qualify for a loan with a traditional lender. Banks and credit unions often require a lot of paperwork that not everybody may be able to provide even if they are more than capable of repaying the loan. Private lenders are friendlier for freelancers, self-employed individuals, and small business owners.

Your Property Value is a Factor

Lenders will have to assess how much they stand to lose in the event of property value fluctuations because even small fluctuations can mean tens or even hundreds of thousands of dollars. It is normal for them to ask you for a lot of details regarding this factor.

Maintenance is Key

You will have to make sure that you can take care of maintenance needs because no lender will lend you money (an investment on your property from their part) if the said investment is not sound, to begin with. You’ll have to be able to pay for maintenance and not let things get out of hand.

Title Issues Are a No Go

A title search is pretty much a requirement before you can apply for a private mortgage because this provides extra protection for the lender. After all, they can’t give you a mortgage on a home that you can’t prove you own.

No Outstanding Tax Complications

Given that tax laws are tricky and the government will really go after someone who hasn’t paid tax obligations, getting rid of tax issues is a must before even considering getting a private mortgage to avoid issues down the line.

Be Ready for Private Mortgage Agreements

Because a private mortgage is a type of loan, everything will have to be put into writing for details to be well documented. This ensures that no issues will come up later should one party forgets the terms they agreed to. Make sure that your documentation will include details on:

  • Payment terms
  • Acceptable forms and channels of payments
  • Possible penalties for failure to make payment
  • Prepayment stipulations if allowed
  • Collateral for the loan (in full detail)
  • Foreclosure terms

Doing a Private Mortgage Correctly

The best way to make sure that you do a private mortgage correctly and avoid possible expensive mishaps is to engage the help of mortgage professionals who can help you find private mortgage lenders as well as assist you in negotiating terms that are within your capacity to meet. The last thing you want is to make uninformed decisions that can cost you your home.

Do you want to speak with a mortgage professional to really determine if a private mortgage is the best financing option for you? Talk to us today!

More Canadians Are Turning To Private Mortgage Lenders and Here’s Why

An increase in Canada’s mortgage rates will eventually happen and when it does, the national real estate market will get one of the biggest shocks it will ever have in the past 3 decades or so. There is fear that the real estate bubble will burst and policymakers are busy trying to prevent that from happening by deflating the bubble while they still can.

Popularity Rise

In view of the above, it is little wonder then that private lender mortgages have become more popular in the last decade. If recent marketplace changes are to be considered, then the private mortgage lending industry is bound to get more action soon. This is because the jump in home values have resulted to tighter regulations on banks which in turn have imposed stricter qualifications as to whom can borrow from them.

Private mortgage lenders generally cater to people who’ve been turned away by banks. Other typical customers are people who have bad credit, are new immigrants, or are self employed. A private mortgage lender’s screening is typically more reasonable than a bank’s. They can afford to be like this because they aren’t as deep into paperwork as banks.

With the above said, lending rules in Canada are becoming more and more strict in recent years due to fear of the real estate bubble bursting. This fear is what is causing the government to create dramatic changes in an effort to cool down the market but making borrowing a lot more difficult for people who need cash.

Answering Demand

People who need emergency cash are turning to private mortgage lenders if they need a large sum of money. True, private lenders are nowhere near inexpensive but they are still the best option for many people who have no chances of being able to borrow from banks or certain institutions.

How and why private mortgage lenders can lend money to people with bad credit or in bad financial status is because they operate in an unregulated environment. Their operations are still small, estimated at just around 15% of new mortgages in Canada but even that small amount was a result of a rapid climb in the need for their services since the recession in 2008 to 2009. Their market share of just 0.8% of the mortgage market continually increased by 25% shared CIBC World Markets deputy chief economist Benjamin Tal.

Private Lending Now

The private lending market is currently saturated with big players with huge companies cashing in on the demand and competitors outplaying each other’s ads to remain on top.

The Canadian government is doing what it can to significantly cool the market, prevent further rise, and avoid crashing the market while doing both. An example of the government doing this can be seen in the implementation of the foreign buyer tax in British Columbia which had an immediate effect of stopping further price increase in the area and surrounding markets.

Is the above bad? That still remains to be seen. But if you’re one of those who can no longer apply to banks for a mortgage, you may want to look up how to get a mortgage from a private lender.

Need help connecting with trusted private mortgage lenders? Contact us and we’ll help you apply for and secure a loan today!

Not Qualified for a Bank Mortgage? Get a Private Mortgage Instead!

Qualifying for a bank mortgage is like trying to trying to place the moon in a tiny cup for people who do not have near perfect financial records. And it is not just them. This also affects individuals who’ve only recently moved to Canada as well as people who are self employed. What’s there to do?

If you’re one of the above or have credit problems, there are still mortgage solutions for you. Sure, banks may not be best option more so with the new mortgage rules for this year; but a quick talk with mortgage specialists will let you know that you may just be an application away from alternative mortgages and private mortgages.

Financing with a Private Mortgage

Using a private mortgage for financing is especially helpful for the following people:

  • Private investors
  • Self-employed people
  • Non-Canadian residents
  • Foreign investors
  • Those with a bad credit
  • Those planning to but small condos or micro condos that are under 600 square feet
  • People who have a commercial or construction loan
  • People whose property is under foreclosure
  • Those who still owe taxes to the Canada Revenue Agency
  • Business people who want to start a business with the use of equity takeouts
  • Those who are not fully paid for their property tax

It should be noted that banks are not the place to apply for a private mortgage for most people. Fortunately, professional mortgage brokers can help with connecting borrowers with the right individuals and businesses that can lend private mortgage or a helping hand (financially speaking).

Applying for a Private Mortgage

Getting an approved application for a private mortgage is subject to a lot of factors. You should know that if you’re planning to purchase property, then you will have to get financing for the 15% to 20% down payment that you need to initiate your purchase. You should also know that your mortgage rates will vary based on whether you’re buying your first, second, or third real estate property. As for payments, you can opt for interest only payments or make it an open loan so you’ll have the freedom to just pay all your mortgage early with no penalty.

Find a Good Mortgage Broker

Know that your private mortgage will have certain fees. This is how the broker gets paid and how some of the paperwork is paid for. The fee can be as little as $500 or as high as 5% of the amount you borrowed. This fee will vary from one mortgage broker to another.

A good mortgage broker should help you plan an exit strategy in the event that you want to move to a lower-rate mortgage. That’s what we do at Homebase Mortgages because we believe in helping you each step of the way. We want to protect your best interests because that’s how we ensure that you’ll be able to do financially better in the long run.

Ready to apply for a private mortgage? Contact us and we’ll assist you with our mortgage services each step of the way!

Why Use Private Mortgage Loans

Private mortgage loans are helping people have access to funds they won’t otherwise have by using their property as a collateral. Of course, one can try to get a traditional loan from the bank or some other financial institution but that may not always be possible due to a variety of reasons. Here are some of them:

Qualifying Issues

Institutions often require that the borrower have a good credit score in addition to having a good property plus a lot of other requirements. In some cases, loans are not approved because the borrower’s property is not producing a good enough income to qualify as collateral or that it requires too many repairs or significant rehabilitation to be usable.

When institutions decline a borrower, it is often then that they seek other sources of funds and come across a private mortgage lender. Private mortgage lenders do not care about somebody’s credit score or some other requirements. They only often require that the amount to be borrowed is fair considering the property’s appraised value and the borrower’s projected income. Simply be able to pay the loan or have property that can offset the cost of the loan in the event of a default is all they require.

The Need for Privacy

Applying for a loan in an institution means filling up paperwork and a lengthy verification process leading to several people becoming aware of the loan application. If a person is going through a divorce or has a new lawyer that he or she may not be very comfortable with yet, this can be a very stressful time. Private mortgage lenders do not put borrowers in such a predicament and do not care if someone is delayed in his tax return or if his property information details are not up to date.

Speed Issues

Mortgage money from financial institutions or banks can take 60 to 90 days to get to the borrower. This is because traditional lenders often require an extensive assessment of the borrower’s current financial status, credit history, tax returns, and financial statements aside from getting the appraised value of the property.

On the other hand, private mortgage lenders usually just take 7 to 10 days to complete a transaction. This is because they usually only require assessment of the property as the main criteria before approving a loan therefore resulting in a significantly quicker approval process. They can decide in a matter of a day or two with no need for a loan approval committee like what is seen in traditional financial institutions.

Needing More Money

Private mortgage lenders may allow the borrower to borrow more because they only use the property’s appraised value with no need to subtract their own capital or adjust based on the borrowers’s income. This means that the borrower may be able to push for a bit more as long as the private mortgage lender is amenable. Win-win!

Ready to apply for a private mortgage? Let our professional mortgage brokers lend a helping hand. Contact us for private mortgage assistance.

The Benefits of Using a Private Mortgage Lender

It seems that not many are aware of the benefits of private mortgage and how they can be used by almost anyone. Private mortgages are truly an under used option by mortgage applicants perhaps because some may not know that it can be the best option for those who have a high possibility of being turned down by traditional lenders or those who just want a bit more flexibility than what a bank can offer.

Alternative Option for Those Turned Down By Strict Lending Rules

Because more regulations are presently being imposed on potential homeowners, it is understandable that not all who apply will qualify. People who have no guarantor or those who have no means to pay a higher interest rate are likely to be turned down.

As it is, an example of how things can change would be the rules imposed in October 2016 courtesy of the Federal Government. It made private lenders change how they give private mortgages to people.

How to Apply for a Private Mortgage

Applying for a private mortgage can be a tricky process. You can try to meet and approach private lenders by searching on the web or perhaps by word of mouth as private lending is a legitimate business. Hopefully you won’t have to resort to hiring a private investigator in Mississauga order to find the right one! The thing is that each private lender has their own regulations and stipulations so shopping around may not be as easy as most may think.

Advantages of a Private Mortgage

Because not everyone has a strong credit rating, a stable job, big home equity, and more, applying for a bank loan is not for everybody. Big banks usually turn down borrowers who do not check enough of their boxes. This is why private mortgage financing is such a great alternative for a lot. People who can reap the advantages of a private mortgage include:

  • Foreign investors
  • Anyone looking to flip a property
  • Applicants who owe taxes
  • Self-employed people
  • Applicants who are rebuilding their credit score
  • Those who are looking for equity for other ventures such as starting a business

Disadvantages of a Private Mortgage

Your property matters a great deal when applying for a private mortgage. This is why people with properties in undesirable locations may be rejected by lenders. Another disadvantage of a private mortgage is that the fees because this can vary so much between lenders. Note that private lenders pay 1% to 5% of the borrowed amount to the broker that made it possible, hence, the discrepancy. Another possible disadvantage is you choosing one that would be nearly impossible to pay within your means and present financial status. Extra care is truly needed.

Still unsure if approaching a private lender or applying for a private mortgage is for you? Talk to us at Homebase Mortgages so we can walk you through what you need to know. We can also help you get approved as well as review the terms for you so you can be sure that you end up with a private mortgage that will serve your interests. Contact us at your earliest convenience!

How Private Mortgage Lenders Provide Easy and Secure Financing

People who do not or cannot qualify for the borrowing requirements in Canada’s big banks will find that they have a great option in using a private mortgage lender. How so? Because unlike borrowing from a traditional lender, a loan from a private mortgage lender usually comes from a group of investors or an individual investor who use their assets to lend funds to others. The best part about this is that there won’t be issues with banks!

Canadians Choose Private Lenders

Housing prices have soared quite wildly in Canada since 2009 but at the same time, interest rates have been at a record low. This trend is expected to continue for the rest of 2017 but not very welcome to many because the changing times have made it quite difficult for an average Canadian to procure a loan.

With the above said, those who have been turned down by banks due to unsteady income or low credit score have a lifeline in private mortgages. Canadians who dream of being homeowners turn to private mortgage lenders to make their dream come true.

The above is supported by the fact that about 5% of the overall mortgage market in Canada is composed of private mortgage lenders. In Ontario, they comprise about 4% of new mortgages, a total of about $1.1 billion in mortgages.

All the above points to the reality that borrowing from private lenders is increasingly helping those who cannot borrow from banks due to the tightening mortgage rules in Canada.

Choosing a Private Mortgage Lender Benefits

Because buying a home in Canada entails a down payment of 20% and not everyone have that kind of money in savings, private lenders are more and more in the spotlight. Note that banks in Canada will only fund 80% of a property’s purchase price and a private mortgage lender will usually finance more than that, making it more attractive for self-employed Canadians and those who cannot produce third-party validation to get a loan.

But how do private mortgage lenders do this? They can because they don’t have to play by the same rules as traditional lenders. Private lenders are often funded by individual investors or a group of investors who have nearly full free rein on how they conduct their business, making the loan application process significantly simpler and easier for those who choose them.

The minimal downside to borrowing from private lenders is they might want to send in their own assessors to ensure that the property they will be financing is a good investment. This is because private loans are uninsured and they make to make sure that they won’t be in the losing end should a borrower default in the future.

Borrow from a Private Mortgage Lender Today!

There are other details that you need to be aware of when borrowing from private lenders but this can vary widely according to the location and the lender. To ensure that you are getting the best deal, it is best to get the help of professional mortgage brokers who can assist you every step of the way. That is exactly what we do at Homebase Mortgages! Contact us to know more!

Why Try a Private Mortgage Lender

Very few people can afford to buy a home without getting some type of loan to make such an investment. If you want to purchase a home, you can try to take a loan from traditional banks or explore other options such as looking up other lenders.

This isn’t to say that all lenders are created equal. You will have to shop for the right mortgage and scrutinize all of your options to ensure that you’ll be getting the best financing with the best rates.

Enter mortgage brokers. They are the people that can help you gain access to lenders with the best rates and terms. Working with professional mortgage brokers will ensure that you’ll not be getting in a situation that you might regret later because their job is to find the right mortgage according to your means and needs.

Yes, an advantage of working with reputable mortgage brokers is that they’ll always have your best interest in mind. They’ll be able to go through many private lenders and use their experience to identify the ones that will give you a great deal. A professional mortgage broker will not only save you from doing a lot of legwork yourself but will also help you save money on fees, interest, and other expenses.

The greatest advantage of having a mortgage broker is that he or she will explain to you how a private mortgage lender can help you out in your dream of having your own home. Below are some other reasons why you should go for a private mortgage lender.

You’ll have Better and More Options

Private lenders work with all sorts of loans, from construction loan if you’re building a house, an agricultural loan if you’re developing land, to helping you get needed funds to renovate a home. They have flexibility, something which most banks don’t have.

You Need a Mortgage that is Perfect for Your Means and Needs

Private lenders offer loans that are tailor-made to you. You can also renegotiate terms to make the loan fit your needs even better. Banks certainly do not offer that. If you think finding private lenders that will bend for you is near impossible, just find a mortgage broker that can make this happen!

Your Credit Score Leaves Much to Be Desired

Okay, you have poor credit and banks will almost certainly deny your loan application the moment they get a glimpse of your credit score. Private lenders can come to your rescue! Of course, you will have to make it worth their while by following their terms but the thing is, a poor credit score isn’t a dead end for you because there will be private lenders who are willing to help you out for a bit of profit.

Ready to get a loan from a private lender? Seek a professional mortgage broker first! A mortgage broker’s invaluable service will not only save you time but also save you money in the long run. Contact us at Homebase Mortgages for additional details.


Are Private Mortgages Like Conventional Mortgages?

private mortgagesPrivate mortgages can be some mysterious business, but once you break them down you’ll see that they’re pretty much the same as a conventional mortgage – only better! Here we’re going to talk about what mortgages offer, why more people are going the private mortgage route and how to make sure that this is the right choice for you. Remember to speak with one of our Toronto mortgage brokers before you start applying for loans; we’ll be able to help you understand what options you have available to you. Let’s get started.

What is a Private Mortgage?

A private mortgage is a loan for a home granted by a private lender. You’ll get access to private bankers, the ability to get bad credit mortgages, reverse mortgages, all kinds of mortgages. You’ll want to make sure that the lender you’re going with is the one that’s right for you. If you’re looking for a good private mortgage lender, talk to us! We’re Canada mortgage brokers that know which lenders will be amenable to your kind of borrowing.

What’s a Conventional Mortgage?

A conventional mortgage is the mortgage your parents and grandparents had – this is a bank mortgage. It could come from the government, it could come from a bank or you could even find a local credit union to work with instead. These kinds of mortgages will be a little harder to get; if you don’t have good credit or you’re just starting out, you may not be able to qualify for this kind of mortgage. It’ll just depend on where you’re at and if you have a cosigner or not.

What’s the Difference between the Two?

Conventional mortgages can be much more stable than private mortgages; they have so many rules behind them for a good reason. But since they have such backing, they can be choosey about who they lend their money to. It’s been shown that over the last 10 years 7 out of 10 people applying for a mortgage has been approved and credit scores on average are sitting at around 700 points. This sounds great – but this is just a section of the population.

If you have good credit and you have a good relationship with your lender, you might be able to get a great deal with your conventional mortgage. If you don’t have either of these things you might want to just consider going with a private mortgage instead.

Which One is Right for You?

It just depends on what you want, but as Canada mortgage brokers we know that the best way to go about it is to apply to both! Sometimes people with bad credit get a great conventional mortgage, sometimes people with great credit get a better deal with a private lender.

The important thing to consider with this situation is what lender you’re working with. It’s not easy to find a lender that will work with you, and that’s where we come in. We have the connections and the understanding of the mortgage market to help you get the one that’s right for you. Contact us today and see how you can save.