Many Canadians have pre-conceived notions about what a private mortgage is. They may think that it is a tool solely for those with damaged credit, or that it is something used by shady lenders to charge high interest rates. But for many, a private mortgage can be a lifesaver. While it is true, that not all lenders in the industry are reputable, if you work with a professional mortgage broker you will easily avoid these unscrupulous practices.
What is a private mortgage?
A private mortgage is a home loan that is offered through a private individual or company rather than through a bank or other major financial institution. It is true that private mortgages tend to have higher interest rates than traditional mortgages, but that is because the lender is usually taking a bigger risk. And if it turns out that a private mortgage is indeed the right product for you, it can be well worth the little extra that you might pay in interest.
Why might you need a private mortgage?
One of the most common reasons for getting a private mortgage is poor credit since private lenders are not required to adhere to the same strict rules as federally regulated lenders. That however, is not the only reason why a private mortgage might be right for you.
Those with little credit history such as entrepreneurs or new immigrants to Canada, can also benefit from getting a private mortgage as it may be more difficult for them to qualify for a traditional mortgage.
Additionally, if you are looking to purchase a non-traditional property, are looking for a very short-term mortgage, or if you need to get your mortgage approved very quickly, a private mortgage is often the best option.
Is a private mortgage right for you?
The best way to know whether or not a private mortgage is the right choice for you is to make an appointment with a mortgage broker. Your broker can assess your needs and current situation to find the best type of mortgage and the best lender for you.
If a private mortgage can help you become a homeowner when you otherwise would not have been able to do so, then the extra that you might have to pay in interest over the next few years can easily pay for itself – particularly with the way that home values have been going up recently. Additionally, you can use a private mortgage to build up your credit score, so that when the term on your mortgage is up, you have a better chance of qualifying for a traditional mortgage.
Contact AKAL Mortgages today!
If you are interested in learning more about private mortgages and about whether this is the right choice for you, contact us today.
When we say YES! We stand behind our promise.®™
