A private mortgage is a alternative source of mortgages for when the bank says no. If you don't qualify for a regular mortgage or don't have time to wait the regular two to three weeks to get the money from a bank or trust company, private lenders can help. Private lenders will not usually lend above 75% of the appraised value of the property.

Generally, private mortgages are offered by large, well established companies who are in the business of lending money. The people who run these companies have lots of experience in determining credit worthiness. These companies range in size from 10 or 15 million in funds and we have several that are in the 250 million dollar range and well established in our industry.

Many of the private lenders offer first and second mortgages, the rates on first can start as low as 5.99% and go as high as 12% depending on the risk involved including your personal credit history. Second mortgages are in place behind a first and are considered higher risk rates for these will probably start at 10% and go as high as 22% depending again on risk. Not unlike CMHC they charge a fee and we as brokers charge our commissions as well, these fees are deducted from the loan.

Most companies that lend for private mortgages get their money from MIC's or mortgage investment corporations. These are funds that have been established as an investment tool and are regulated by the federal government. On the other hand, there are many small investors and business people who like to do a few private mortgages themselves.

A good mortgage broker is your best bet if you are looking for a private mortgage. We will research the market thoroughly to get you the best rate possible. We already have established links to both large and small private mortgage lenders.

This is one time that you really should deal with a mortgage broker. You don't know what your options are and don't know what you can negotiate. An experienced mortgage broker will work with you through the whole process and get you the best interest rate and terms and conditions.