​A private mortgage is a type of loan that's mainly given by private lenders, as opposed to the banks and credit unions. However, more and more private-type mortgages are being offered by financial institutions these days, so there's no longer really much of a difference between the two types.

Private mortgage rates are usually higher than those you'd find with a regular bank, because private lenders generally have less money available to lend. This means they need to charge interest rates that are higher in order to make a profit. A private mortgage won't be right for most people, since it can take longer to get approved for a private mortgage loan and the interest rate is likely to be much more than you'd pay by going through a bank.

A private mortgage will usually have a shorter amortization period than a typical home loan or could be completely interest only, which can also add a lot more interest to the total interest load. An amortization is just how long it takes for you to pay off your mortgage loan. It's based on the total amount of money you borrowed and how much interest you'll pay over the term of your mortgage. A private mortgage will have an amortization period that's usually between 0 and 20 years, whereas a bank loan will probably be 25 to 30 years long at most.

Private mortgage lenders can also charge fees such as lender fees, private mortgage interest and private mortgage loan registration. The lender will send you a breakdown of these fees in the form of a mortgage commitment. If you have arranged a private mortgage through a mortgage brokerage, there will also be broker fees.

Private mortgages can be closed or open. If they are closed, this means you cannot prepay the mortgage within the term, and if you break it earlier than expected, you will have to pay a mortgage penalty. If you choose an 'open' private mortgage, you can pay off the loan at any time without a penalty.

Since private mortgage lenders are not banks but usually individuals or corporations, they adhere to different laws. This is important for issues such as non-payment or delinquency. Whereas a bank may require the payments to be at least three months in arrears to launch a power of sale, a private lender could launch one as early as being a month in arrears.

Although a private mortgage can be expensive, it can also be the perfect short-term financing solution for a person who cannot approach a major bank or B lender for mortgage financing.

It's best to speak with a specialized mortgage professional who can guide you to the right private lender. Since major banks don't deal directly with private lenders, mortgage brokers would be your best option for information.


Do you have mortgage questions? Book a free consultation today ----> https://calendly.com/sarahcoluccimortgage.
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Sarah A. Colucci, Senior Mortgage Agent
Mortgage Edge, Broker 10680/Direct: 647-773-4849
www.coluccimortgages.com

STEP 1: DO THE MATH When refinancing, the biggest factor in determining whether refinancing makes financial sense is the difference between the interest rate on your current loan and what a new lender will offer you.

The math is pretty simple. The refinanced loan amount divided by the new interest rate equals your monthly savings. For example, if you are refinancing a $200,000 mortgage with an interest rate of 6.125% and the refinancing lender is offering a rate of 4.50%, your monthly savings will be $131.43, or $1,650 annually (assuming a 30-year loan with even monthly payments). If you plan on living in your home for the long term, refinancing to lower your interest rate can more than pay for itself.

STEP 2: CHOOSE A LENDER The refinancing process includes choosing a new lender – not just any lender with the lowest advertised rate. You want to choose a lender who will work with you throughout the refinancing process. You should also explore working with a mortgage broker to save you time when shopping for the best mortgage products available.

STEP 3: GATHER YOUR DOCUMENTS You will need to gather several documents when refinancing. These include a copy of your identification, your most recent pay stubs or tax returns, and any other documentation related to your earnings and assets. There are also several legal documents you will need to have prepared by a lawyer.

STEP 4: REFINANCE YOUR LOAN The refinancing process also involves refinancing your loan with the new lender. This will take a couple of weeks to complete, during which time you will be expected to continue making payments on your previous mortgage.

STEP 5: CLOSE THE LOAN Once refinancing is complete, you will have to sign a new mortgage agreement with the lender and have your new mortgage registered against the title to your property. Your old mortgage will be discharged off of title. Your lender will also notify your previous lender of the refinance. And you're done! You now have one simple monthly mortgage payment instead of two.

Do you have mortgage questions? Book a free consultation today ----> https://calendly.com/sarahcoluccimortgage.

Sarah A. Colucci, Senior Mortgage Agent
Mortgage Edge, Broker 10680/Direct: 647-773-4849
www.coluccimortgages.com

In this blog post, we will discuss 3 great reasons to refinance your mortgage.

You may be able to qualify for a lower interest rate than what you are currently paying on your home loan.

Refinancing is a great option if you want to save money on your mortgage payments and free up cash flow each month. Usually, it makes sense to refinance if you are trading a higher interest rate for a lower interest rate. 


Mortgage refinancing is often an option for people with mortgages that have variable or adjustable rates because they have more flexibility in setting the terms of their refinanced loan.

Unlike many fixed rate mortgages, breaking a variable rate mortgage is only three months' worth of interest. The low penalty gives borrowers flexibility to refinance to accomplish debt consolidation or extract funds from their home's equity for renovations. 


It may allow homeowners the opportunity for more favourable refinancing terms such as longer repayment terms, lower monthly payments, etc.

Borrowers may extend their amortization period to reduce their monthly mortgage payments through refinancing. An amortization period cannot get extended once in a closed mortgage, so refinancing can help accomplish this to free up cash flow.


Do you have mortgage questions? Feel free to call or write.


Sarah A. Colucci, Mortgage Agent 
Mortgage Edge, Broker 10680
Direct: (647) 773-4849
Email: sarah.colucci@mortgageedge.ca 
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On the surface, it may make sense to hammer down your mortgage balance to become mortgage free as soon as possible. After all, not having a mortgage means you will have more cash flow each month without the burden of mortgage payments. 

The only way to pay off your mortgage early is to make more than the minimum principal and interest payments, which you can accomplish by increasing your monthly mortgage payment or making lump sum payments throughout your mortgage term. When you put extra money towards your mortgage, you automatically decrease its amortization period, therefore becoming mortgage-free years earlier.  

When mortgage interest rates are low, however; it may not make sense to focus on paying your mortgage down by using your extra cash because your money could earn a higher rate of a return in a savings account or through other investments (provided they are not volatile).  Therefore, by using extra cash to pay down a debt that has low interest instead of saving at a higher interest rate, you inadvertently shrink your potential assets.  

Something really important to consider is potential unexpected financial problems and what that means for you. If you put all of your cash into paying down your mortgage faster, you may put yourself at higher risk of mortgage default even if you have a small mortgage balance remaining. If you’re unable to pay your mortgage, the bank can launch a power of sale or foreclosure regardless of how much equity you have. However, if you save the extra money and direct it into investments or in a bank account that earns higher interest, you essentially protect yourself against financial distress, mortgage default and losing your home to the bank. 

In the end, you can use all the money you save to pay off the mortgage at once instead of using extra cash flow each month to chip away at it. Of course, if your mortgage has a higher interest rate –more than what you would earn in the bank or through other investments, it may make sense to pay your mortgage off early by increasing your payments. 

Alternatively, you can balance personal finance using both ideas. You can save your money while also increasing your mortgage payments in order to reduce your amortization period. 

Do you need a mortgage plan? I can help you structure your mortgage in a way that helps you free up more cash flow each month. 

Please call or write today.

Sarah A. Colucci
Mortgage Agent, Lic. M14000929
Mortgage Edge, Broker 10680
Direct: (647) 773-4849
Email: sarah.colucci@mortgageedge.ca 

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