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Private and second mortgages · British Columbia
Private mortgages in BC, with a plan to get back to a bank
When a bank or credit union can't say yes, or can't say it fast enough, a private mortgage can bridge the gap. I'll be straight with you about the cost, and we'll plan your way out before you sign.
Service in English, Punjabi and Hindi · ਪੰਜਾਬੀ · हिन्दी
What it is
What is a private mortgage?
A private mortgage comes from a private lender instead of a bank or credit union. Private lenders include mortgage investment corporations (MICs), groups of investors and individual lenders. They focus mainly on the equity in your property and your plan to repay, rather than only on your income and credit score.
A private mortgage can be a first mortgage, or a second mortgage that sits behind your current one so you can keep your existing rate.
When it helps
When a private mortgage makes sense
- Bruised credit: late payments, collections, a consumer proposal or a past bankruptcy.
- Income that is hard to prove: new businesses, cash income, or income a bank won't count yet.
- Speed: a purchase closing soon, or a deal the bank can't approve in time.
- Bridge financing: buying before your current home sells.
- Arrears: behind on property tax, CRA or mortgage payments, where catching up quickly protects your home.
- Properties banks avoid: land, unique homes, or properties needing work.
- Short-term business needs secured by real estate you own.
The honest part
What it costs
Private mortgages cost more than bank mortgages. Expect:
- Higher interest rates than banks and credit unions.
- Short terms, usually 6 to 24 months, often with interest-only payments.
- A lender fee and a fee for arranging the mortgage, usually a percentage of the loan and often taken from the funds at closing.
- Legal and appraisal costs, and sometimes a renewal fee if you need more time.
- A lower maximum loan than a bank, based on how much equity you have.
Before you sign anything, you get a written disclosure showing the interest rate, every fee, the total cost of borrowing, and how I am paid. You should also get independent legal advice from your own lawyer.
The way out
Your exit plan comes first
A private mortgage should be a bridge, not a place to stay. Before we apply, we agree on how you'll pay it off, for example:
- Rebuilding your credit so you can move to a bank or credit union at renewal.
- Showing two years of business income on your tax returns.
- Selling a property, finishing a build or collecting money you are owed.
I'll check in before your term ends and work on moving you to a lower rate as soon as you qualify.
How it works
Private mortgage in four steps
- Free call. Tell me about the property, what you owe and what you need the money for.
- Options and costs in writing. I compare private lenders and show you the full cost before you decide.
- Appraisal and approval. Private lenders can often move quickly once the appraisal is in.
- Legal and funding, then we start working on your exit plan right away.
Questions
Frequently asked questions
Can I get a private mortgage with bad credit?
Often, yes. Private lenders look mainly at the equity in your property and your plan to repay. Credit still matters for the rate and terms, but a low score on its own doesn't rule you out.
How much can I borrow with a private mortgage?
It depends on your property's value and what you already owe on it. Private lenders usually lend less of the property's value than banks do. I'll give you a realistic number after a quick look at your property.
How fast can a private mortgage close?
Usually faster than a bank. Once the appraisal and documents are in, many private lenders can approve and fund quickly, but legal steps still take some time.
What is a second mortgage?
A second mortgage is registered behind your existing mortgage. It lets you borrow against your equity without breaking your current mortgage and paying a penalty, which helps if your first mortgage has a low rate.
What fees will I pay?
Usually a lender fee, a fee for arranging the mortgage, plus legal and appraisal costs. Every fee and the total cost of borrowing are in a written disclosure you get before you sign.
Is a private mortgage risky?
It costs more and the term is short, so the main risk is not having a way out when it ends. That's why we plan your exit before you apply, and I'll tell you if a private mortgage isn't the right move.
Bank said no?
Tell me what happened and what you need. I'll tell you honestly whether a private or second mortgage makes sense. Service in English, Punjabi and Hindi.