Private Mortgage In Canada

About Private Mortgage In Canada

A private mortgage is a home loan funded by an individual investor, mortgage investment corporation (MIC), or private lending company — instead of a bank, credit union, or other traditional “A” lender.Where a bank underwrites you mainly on income, credit score, and the mortgage stress test, a private lender in Ontario underwrites primarily on the equity in your property. That single difference is why private mortgages exist: they fill the gap for good properties attached to financial situations banks aren’t set up to say yes to. Private mortgages are usually short-term (six months to three years), carry a higher interest rate than a bank mortgage to offset the lender’s added risk, and are meant to be a bridge — to rebuilt credit, to a sale, or back to conventional “A” lender financing.