Sarah A. Colucci, York Region's Mortgage Expert. Savings Guaranteed.
  • Home
  • WHY USE SARAH FOR YOUR NEXT MORTGAGE
  • APPLY ONLINE
  • PRODUCTS
    • Free House Value Tracker Report
    • CASH-BACK MORTGAGE
    • BRIDGE FUNDS
    • REVERSE MORTGAGES
    • SELF-EMPLOYED MORTGAGES
    • FIRST-TIME HOME BUYER PRE-APPROVALS >
      • FIRST-TIME HOME BUYER TAX CREDIT
    • MORTGAGE REFINANCE >
      • Prepayment penalties
    • SPOUSAL BUYOUTS
    • INVESTMENT PROPERTIES AND RENTALS
    • BRUISED CREDIT
    • PRE-APPROVALS
    • NEWCOMERS
    • DEBT CONSOLIDATION
    • HOME EQUITY LINE OF CREDIT
    • PURCHASE PLUS IMPROVEMENT PROGRAM
    • WHY INVEST IN REAL ESTATE
    • MORTGAGE RENEWALS >
      • New Mortgage Rules and Mortgage Renewals
    • SECOND MORTGAGE LOANS
    • LESS THAN 20% PROPERTIES
    • DOWN PAYMENT
  • CONTACT ME
  • PRIME RATE CANADA
  • CLOSING COSTS
  • DOCUMENTS REQUIRED FOR MORTGAGE FINANCING
  • MORTGAGE DICTIONARY
  • MORTGAGE NEWS
  • GOVERNMENT MORTGAGE RULES
  • MORTGAGE TIPS
  • HOUSE HUNTING CHECKLIST
  • APPRAISALS
  • FIXED OR VARIABLE RATE?

Sarah Colucci's Mortgage Blog

Stay enlightened about mortgage & real estate news in Canada.
Mortgage News 2022

Do you really need a private mortgage?

7/28/2021

2 Comments

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

RSS Feed

2 Comments
second mortgage link
1/2/2022 00:22:26

Thanks for writing an article that I found easy to read and understand. I just found this site and am looking forward to reading more of your posts!

Reply
how does a home equity line of credit work link
1/18/2022 23:16:26

Love the post!
One thing that I found in your blog posts is very detailed with info and ultimate graphics. Thanks!!

Reply



Leave a Reply.

    Picture

    By: Sarah Colucci

    Senior Mortgage Agent, Lic. M14000929

    Archives

    January 2023
    October 2022
    September 2022
    July 2022
    June 2022
    May 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    August 2021
    July 2021
    June 2021
    May 2021
    February 2021
    December 2020
    November 2020
    October 2020
    September 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    February 2019
    January 2019
    December 2018
    August 2018
    May 2018
    April 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017

    Categories

    All

    RSS Feed

GET IN TOUCH WITH US

Let's get started today.



Address

411 Queen St. 
Newmarket, ON
​L3Y 2G9

Sarah A. Colucci, Mortgage Agent Lic. M14000929
Sherwood Mortgage Group
Licence # 12176

Telephone

Direct: 647-773-4849
​
Email: scolucci@sherwoodmortgagegroup.com
Picture
  • Home
  • WHY USE SARAH FOR YOUR NEXT MORTGAGE
  • APPLY ONLINE
  • PRODUCTS
    • Free House Value Tracker Report
    • CASH-BACK MORTGAGE
    • BRIDGE FUNDS
    • REVERSE MORTGAGES
    • SELF-EMPLOYED MORTGAGES
    • FIRST-TIME HOME BUYER PRE-APPROVALS >
      • FIRST-TIME HOME BUYER TAX CREDIT
    • MORTGAGE REFINANCE >
      • Prepayment penalties
    • SPOUSAL BUYOUTS
    • INVESTMENT PROPERTIES AND RENTALS
    • BRUISED CREDIT
    • PRE-APPROVALS
    • NEWCOMERS
    • DEBT CONSOLIDATION
    • HOME EQUITY LINE OF CREDIT
    • PURCHASE PLUS IMPROVEMENT PROGRAM
    • WHY INVEST IN REAL ESTATE
    • MORTGAGE RENEWALS >
      • New Mortgage Rules and Mortgage Renewals
    • SECOND MORTGAGE LOANS
    • LESS THAN 20% PROPERTIES
    • DOWN PAYMENT
  • CONTACT ME
  • PRIME RATE CANADA
  • CLOSING COSTS
  • DOCUMENTS REQUIRED FOR MORTGAGE FINANCING
  • MORTGAGE DICTIONARY
  • MORTGAGE NEWS
  • GOVERNMENT MORTGAGE RULES
  • MORTGAGE TIPS
  • HOUSE HUNTING CHECKLIST
  • APPRAISALS
  • FIXED OR VARIABLE RATE?