YORK REGION MORTGAGE BROKER, SARAH COLUCCI, 20 YEARS OF EXPERIENCE HELPING HOMEOWNERS!
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Welcome to Our Smart Mortgage Blog

​Navigating mortgage financing can be daunting, but with the right strategy, it's manageable. This blog offers expert advice and insights on understanding interest rates and leveraging market trends for smart real estate investments. Whether you're a first-time buyer or a seasoned investor, "Our Smart Mortgage Blog" will provide the tools to make informed decisions and achieve your homeownership goals. Let's dive in and secure the best outcomes together.

Do you really need a private mortgage?

7/28/2021

3 Comments

 
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​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

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3 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
Janet Bidwell link
6/3/2023 14:38:48

Having this article, I was glad, and finally, I got the right direction which helped me to understand the pros and cons of private mortgage rates perfectly. Thanks for sharing this insight thought with us.

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    By: Sarah Colucci

    Senior Mortgage Agent, Level 2, Lic. M14000929, 
    Sherwood Mortgage Group, Broker 12176, 
    Direct: (647) 773-4849

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Address

411 Queen St. 
Newmarket, ON
​L3Y 2G9

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

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Direct: 647-773-4849
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Email: [email protected]
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